US Senators Urge Treasury to Protect State Stablecoin Authority

TLDR

• Senators press Treasury to keep state stablecoin oversight open.
• GENIUS Act rollout raises new questions over state authority.
• Lawmakers seek flexible rules for state stablecoin regulation.
• Treasury faces pressure to clarify stablecoin certification rules.
• States seek a clear path to regulate smaller stablecoin issuers.

State oversight sits at the center of a new Senate push over the GENIUS Act. A bipartisan group of lawmakers urged Treasury to protect state authority over stablecoin issuers. The move seeks a clear and flexible path for states that want to supervise smaller issuers.

Senators Push Treasury for Clear State Certification

Senator Cynthia Lummis led the bipartisan letter to Treasury Secretary Scott Bessent. The lawmakers asked Treasury to clarify how states can qualify under the GENIUS Act. They said the process must support state participation and avoid narrow limits.

The GENIUS Act creates a pathway for state regulation of payment stablecoin issuers. It allows state oversight when issuers hold stablecoins worth $10 billion or less. Those states must maintain rules that largely match the federal framework.

The senators said Treasury’s proposal did not explain the full certification process. As a result, states may face uncertainty while drafting their own stablecoin laws. The group urged Treasury to issue written guidance with timelines and procedural steps.

State Banking Role Takes Focus

The lawmakers framed the issue around the United States dual banking system. They said Congress designed the GENIUS Act to preserve state banking authority. Treasury should not treat certification as a limited or one-time process.

Several states are still weighing stablecoin laws or related rules. However, state legislative calendars differ, and some operate on biennial cycles. Because of that, lawmakers said Treasury must allow ongoing certification requests.

The senators also pointed to the annual recertification requirement in the GENIUS Act. They said that structure supports a continuing partnership between federal and state regulators. Treasury should keep the state pathway open over time.

Stablecoin Market Threshold Shapes Oversight

The market threshold would place most stablecoin issuers under possible state supervision. Only the largest stablecoins currently sit above the $10 billion level. That group includes Tether, USDC and USDS, according to market data cited in the report.

Tether remains the largest stablecoin, so it would fall outside the small-issuer state pathway. USDC also exceeds the threshold and would face federal-level treatment. USDS, formerly Dai, also stands above the same market value limit.

The GENIUS Act therefore creates a split between large and smaller stablecoin issuers. Smaller firms could seek state charters if their states receive certification. However, that option depends on Treasury’s final rules and implementation process.

Treasury Rulemaking Moves Toward Final Stage

Treasury sought public input in April on state-level implementation. The comment period closed on June 2. The department will now prepare a final rule for publication in the Federal Register.

President Donald Trump signed the GENIUS Act into law in July 2025. The law created federal rules for payment stablecoins and their issuers. It also established a framework for state regimes that meet federal standards.

The senators said Treasury must support responsible innovation and effective supervision. They also said a flexible process would protect competition in a growing market. Their letter now places state authority at the center of the GENIUS Act rollout.

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