Key Points
- Led by Senator Cynthia Lummis, a cross-party group of lawmakers contacted Treasury Secretary Scott Bessent demanding transparent state certification guidelines under the GENIUS Act.
- Enacted in July 2025 after President Trump’s signature, the GENIUS Act establishes regulatory standards for stablecoin operators and permits state supervision of digital currencies valued at $10 billion or below.
- The Treasury Department’s April regulatory framework failed to establish definitive timelines or procedures enabling states to obtain certification as authorized stablecoin supervisors.
- Currently, just three digital currencies — Tether, USDC, and USDS — surpass the $10 billion market cap requiring federal regulation; remaining stablecoins qualify for state-level supervision.
- Lawmakers are requesting comprehensive written protocols featuring explicit deadlines, adaptable procedures, and continuous certification windows for state authorities.
A cross-party coalition of U.S. senators is demanding that the Treasury Department establish transparent and equitable procedures allowing individual states to supervise stablecoins under recently enacted federal legislation. Legislative leaders contend that existing Treasury proposals fail to provide states with adequate direction on implementation steps.
State Authority Under the GENIUS Act Framework
The GENIUS Act — formally titled the Guiding and Establishing National Innovation for U.S. Stablecoins Act — became law following President Donald Trump’s signature in July 2025. The legislation creates a comprehensive regulatory structure governing stablecoin operators nationwide.
According to the statute, digital currency issuers maintaining market capitalizations of $10 billion or lower may operate under state regulatory jurisdiction, provided those states implement rules substantially aligned with federal standards. Presently, only three stablecoins possess sufficient market size to trigger federal regulatory requirements: Tether, USDC, and USDS, previously identified as Dai. All remaining stablecoins in circulation would qualify for state regulatory oversight.
This design makes state participation a fundamental component of the legislation’s structure. However, congressional leaders argue the Treasury Department has failed to establish actionable guidelines for states.
Identified Gaps in Regulatory Guidance
In correspondence dated Tuesday, lawmakers headed by Republican Senator Cynthia Lummis — who chairs the Senate Banking Committee’s digital asset subcommittee — addressed Treasury Secretary Scott Bessent. They expressed concern that the Treasury’s April regulatory proposals omitted critical details regarding state certification applications.
“Treasury’s proposed principles did not address the timeline and procedural requirements related to state certification,” the correspondence stated.
The senators cautioned that absent explicit direction, states might interpret the certification opportunity as a limited-time offer with no future availability. They emphasized this scenario could permanently exclude states from regulatory participation.
The letter received additional signatures from Republicans Bill Hagerty, Kevin Cramer, and Pete Ricketts, alongside Democrats Kirsten Gillibrand, Angela Alsobrooks, and Catherine Cortez Masto.
The coalition maintained that Congress intentionally structured the GENIUS Act to uphold America’s longstanding “dual banking system,” wherein federal and state regulators maintain concurrent jurisdiction over financial entities.
They emphasized that state legislative bodies function according to varying schedules and operational calendars. An inflexible, standardized approach would substantially diminish participation opportunities for numerous states.
Senators are requesting the Treasury Department issue formal procedural documentation incorporating transparent application protocols, defined evaluation timeframes, and continuous certification availability accommodating diverse state legislative timetables.
The public commentary period for the Treasury’s initial proposals concluded on June 2. The department will now advance toward publishing definitive regulations in the Federal Register.
The senators’ advocacy emerges as companion cryptocurrency legislation — the Digital Asset Market Clarity Act — advances through Senate consideration.
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