Key Takeaways
- Senator Cynthia Lummis leads bipartisan coalition requesting Treasury Secretary Scott Bessent provide comprehensive state certification guidelines under the GENIUS Act framework.
- President Trump signed the GENIUS Act into law in July 2025, creating federal regulatory structure for stablecoin issuers while permitting state oversight for smaller digital currencies.
- Treasury Department’s April guidance failed to establish concrete procedures or timelines for states seeking regulatory certification status.
- Currently, Tether, USDC, and USDS represent the only three stablecoins surpassing the $10 billion market cap requiring federal supervision; remaining stablecoins qualify for state-level governance.
- Legislative coalition requests formalized procedural documentation featuring explicit timelines, adaptable application frameworks, and continuous certification windows for participating states.
A cross-party group of United States senators is challenging the Treasury Department to establish transparent, accessible procedures enabling state governments to regulate digital stablecoins under recently enacted federal legislation. The congressional coalition contends that existing Treasury guidance fails to provide adequate direction for state regulators.
State Authority Under GENIUS Act Framework
The GENIUS Act — officially titled the Guiding and Establishing National Innovation for U.S. Stablecoins Act — became federal law when President Donald Trump signed the legislation in July 2025. The statute establishes comprehensive regulatory standards for entities issuing stablecoins nationwide.
According to the legislation’s provisions, stablecoin projects maintaining market capitalizations of $10 billion or below may operate under state regulatory frameworks, provided those state regulations substantially align with federal requirements. At present, just three digital currencies exceed this threshold and therefore require direct federal supervision: Tether, USDC, and USDS (previously operating as Dai). All remaining stablecoins in circulation would operate within state jurisdictional boundaries.
This structure positions state regulatory participation as fundamental to the law’s implementation strategy. However, congressional leaders argue Treasury officials have neglected to provide states with actionable implementation guidance.
Congressional Concerns About Missing Procedures
In correspondence dated Tuesday, lawmakers headed by Republican Senator Cynthia Lummis — who chairs the Senate Banking Committee’s digital asset subcommittee — communicated directly with Treasury Secretary Scott Bessent. Their letter criticized the Treasury Department’s April regulatory proposals for omitting essential details regarding state certification applications.
“Treasury’s proposed principles did not address the timeline and procedural requirements related to state certification,” the congressional correspondence stated.
The senators expressed concern that ambiguous guidance may lead states to interpret certification as a limited-time opportunity with permanent closure. They argued this interpretation could permanently exclude states from regulatory participation.
The bipartisan letter received signatures from Republican Senators Bill Hagerty, Kevin Cramer, and Pete Ricketts, alongside Democratic Senators Kirsten Gillibrand, Angela Alsobrooks, and Catherine Cortez Masto.
The legislative group emphasized that congressional intent behind the GENIUS Act was preserving America’s established “dual banking system,” wherein federal and state authorities maintain shared oversight responsibilities for financial entities.
Lawmakers highlighted that state legislative bodies function according to varied schedules and operational timeframes. Implementing inflexible, standardized procedures would substantially impair many states’ ability to engage in the regulatory framework.
Senators are requesting Treasury officials release formal procedural documentation incorporating transparent application protocols, defined review schedules, and sustained certification mechanisms that recognize diverse state legislative timetables.
The public commentary period regarding Treasury’s initial proposals concluded on June 2. Treasury officials will subsequently develop final regulations for Federal Register publication.
This senatorial initiative emerges alongside separate cryptocurrency legislation — the Digital Asset Market Clarity Act — which remains under consideration in the Senate chamber.
