The National Cryptocurrency Association (NCA) has submitted a formal comment letter to the U.S. Treasury regarding Section 3 rules of the GENIUS Act, marking a significant step in clarifying stablecoin regulation.
Industry’s framework for stablecoin regulation
Stuart Alderoty, NCA President and Chief Legal Officer at Ripple, signed the document, confirming industry support for a one-hundred-percent reserve requirement for stablecoins. However, he emphasized the need for a practical approach to shield retail users from potential risks associated with regulatory changes.
Alderoty addressed the need to protect Americans from being “stranded holding stablecoins if regulations change.” The NCA proposes a safe-harbor mechanism: a designated period following any issuer’s license revocation or missed compliance deadline—such as the July 18, 2028 date—allowing users to redeem, sell, or convert their stablecoins without incurring losses. This measure aims to provide exchanges with the ability to assist users technically without facing accusations of unlawful trading during this window.
Retail holders must have a temporary window to redeem or convert their stablecoins if an issuer’s license lapses, ensuring they are not left vulnerable during regulatory transitions.
The comment letter also emphasizes the importance of clear legal pathways for recovering stolen assets. The NCA advocates permitting the reissuance of payment stablecoins, under a lawful court order, to replace those lost through theft or accidental transfers. This action would fall under the “except as required by a lawful order” clause, according to the association.
Mini dictionary: National Cryptocurrency Association (NCA), a U.S.-based industry group representing crypto sector interests in regulatory matters.
New boundaries for wallets and self-custody
The NCA further outlined boundaries distinguishing custodial professionals from software developers. Under its proposal, providers of non-custodial wallets and simple balance-display interfaces that do not control private keys should not be classified as intermediaries or sellers by regulatory bodies.
Any transactions conducted directly between individual users or within their personal wallets should remain outside agency restrictions, maintaining the right to self-custody and peer-to-peer transfers.
| Service Type | NCA Proposed Classification | Regulatory Impact |
|---|---|---|
| Custodial wallet providers | Intermediary/Seller | Subject to agency rules |
| Non-custodial wallet software | Developer/Interface only | Outside agency restrictions |
The association recommends that direct peer-to-peer (P2P) transfers, internal account moves, and activity restricted to self-managed wallets be protected from federal intervention, preserving users’ fundamental rights in cryptocurrency management.
Implications for the retail market
By submitting these recommendations, the NCA seeks to shift industry-regulator dialogue toward pragmatic solutions and clear separation of technological responsibilities. The association’s approach aims to define technology’s role while balancing regulatory objectives with market stability.
Market observers note that with this filing, industry leaders have effectively placed the onus for ensuring retail market stability on the Treasury Department. The agency will now determine the final strictness of stablecoin regulations in the coming months.
