Bipartisan Senate Group Demands Treasury Clarify State Role in Stablecoin Oversight

Key Takeaways

• Republican Senator Cynthia Lummis spearheads bipartisan effort demanding Treasury Secretary Scott Bessent provide explicit state certification guidelines under the GENIUS Act.
• President Trump signed the GENIUS Act into law in July 2025, establishing regulatory framework for stablecoin issuers and permitting state oversight for digital currencies valued at $10 billion or below.
• Treasury’s proposals released in April failed to include specific timelines or procedural roadmaps for state certification as stablecoin regulators.
• Just three digital currencies — Tether, USDC, and USDS — surpass the $10 billion market cap requiring federal supervision; remaining stablecoins qualify for state-level governance.
• Legislative coalition requests comprehensive written guidance featuring definitive timelines, adaptable procedures, and continuous certification windows for state participation.

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A cross-party coalition of U.S. senators is demanding the Treasury Department establish transparent procedures enabling states to serve as stablecoin regulators under recently enacted legislation. The lawmakers argue Treasury’s existing proposals provide insufficient direction for states seeking regulatory authority.

State Authority Under the GENIUS Act Framework

The GENIUS Act — formally titled the Guiding and Establishing National Innovation for U.S. Stablecoins Act — became federal law following President Donald Trump’s signature in July 2025. The legislation establishes comprehensive oversight mechanisms for stablecoin issuers nationwide.

According to the statute, digital currency issuers maintaining market capitalizations at or below $10 billion qualify for state-level supervision, provided participating states implement regulations substantially aligned with federal standards. Currently, only three stablecoins possess sufficient market value to trigger mandatory federal jurisdiction: Tether, USDC, and USDS (previously identified as Dai). All remaining stablecoins in circulation would operate under state regulatory frameworks.

This structure positions state oversight as fundamental to the legislation’s architecture. However, lawmakers contend Treasury has failed to articulate actionable steps for state implementation.

Legislative Concerns About Procedural Gaps

In correspondence sent Tuesday, senators headed by Republican Cynthia Lummis — who chairs the Senate Banking Committee’s cryptocurrency subcommittee — addressed Treasury Secretary Scott Bessent directly. Their letter criticized Treasury’s April framework proposals for omitting essential details regarding state certification applications.

The senators cautioned that absent explicit guidance, states might interpret certification as a limited-time opportunity with permanent closure. Such interpretation could effectively exclude states from future regulatory participation.

The letter garnered signatures from Republicans Bill Hagerty, Kevin Cramer, and Pete Ricketts, alongside Democrats Kirsten Gillibrand, Angela Alsobrooks, and Catherine Cortez Masto.

The legislative group emphasized that Congress intentionally crafted the GENIUS Act to maintain America’s established “dual banking system,” wherein federal and state authorities share oversight responsibilities for financial entities.

They highlighted that state legislatures function according to varied schedules and operational timelines. An inflexible, uniform certification process would systematically disadvantage numerous states from meaningful engagement.

Senators are now requesting Treasury publish formal procedural documentation incorporating transparent application protocols, definitive review schedules, and continuous certification availability accommodating diverse state legislative calendars.

Public commentary periods on Treasury’s initial proposals concluded June 2. Treasury will subsequently develop finalized regulations for Federal Register publication.

The senators’ initiative emerges as concurrent cryptocurrency legislation — the Digital Asset Market Clarity Act — advances through Senate deliberations.

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