U.S. Senators Push Treasury to Give States a Clear Role in Stablecoin Regulation

TLDR

• A bipartisan group of senators, led by Republican Cynthia Lummis, sent a letter to Treasury Secretary Scott Bessent urging clearer guidance for states on the GENIUS Act.
• The GENIUS Act, signed by President Trump in July 2025, regulates stablecoin issuers and allows states to oversee smaller stablecoins worth $10 billion or less.
• Treasury’s April proposals did not lay out a clear timeline or process for states to get certified as stablecoin regulators.
• Only three stablecoins — Tether, USDC, and USDS — exceed the $10 billion threshold and would fall under federal oversight; all others qualify for state regulation.
• Senators want written procedural guidance that includes clear timelines, flexible processes, and ongoing certification opportunities for states.

Bipartisan senators are pressing the Treasury Department to give U.S. states a clear and fair process to regulate stablecoins under the new GENIUS Act. The lawmakers say the Treasury’s current proposals leave states in the dark about what steps to take next.

What the GENIUS Act Says About States

The GENIUS Act — the Guiding and Establishing National Innovation for U.S. Stablecoins Act — was signed into law by President Donald Trump in July 2025. It sets up a framework for regulating stablecoin issuers across the country.

Under the law, stablecoin issuers with a market value of $10 billion or less can be regulated at the state level, as long as that state has rules that closely match the federal framework. Right now, only three stablecoins are large enough to require federal oversight: Tether, USDC, and USDS, formerly known as Dai. Every other stablecoin on the market would fall under state authority.

That makes state-level regulation a major part of the law’s design. But senators say the Treasury has not given states a clear path forward.

What Senators Say Is Missing

In a letter dated Tuesday, senators led by Republican Cynthia Lummis — chair of the Senate Banking Committee’s crypto subcommittee — wrote to Treasury Secretary Scott Bessent. They said the Treasury’s April proposals failed to spell out how states can apply for certification to become stablecoin regulators.

The senators warned that without clear guidance, states may see the certification process as a one-time window that closes permanently. They said this could effectively shut states out of future participation.

The letter was also signed by Republicans Bill Hagerty, Kevin Cramer, and Pete Ricketts, along with Democrats Kirsten Gillibrand, Angela Alsobrooks, and Catherine Cortez Masto.

The group argued that Congress designed the GENIUS Act to preserve the traditional “dual banking system,” where both federal and state regulators share authority over financial institutions.

They pointed out that state legislatures operate on different schedules and timelines. A rigid, one-size-fits-all process would make it harder for many states to participate at all.

Senators are now asking the Treasury to publish written procedural guidance that includes clear application steps, review timelines, and an ongoing certification process that accommodates different state legislative calendars.

Public comments on the Treasury’s original proposals closed on June 2. The Treasury will now work toward publishing a final rule in the Federal Register.

The senators’ push comes as separate crypto legislation — the Digital Asset Market Clarity Act — continues to move through the Senate.

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