A bipartisan group of US senators led by Republican Cynthia Lummis has asked the Treasury to ensure states can regulate stablecoin issuers as the department moves to implement the GENIUS Act. In a letter sent to Treasury Secretary Scott Bessent on Tuesday, the lawmakers emphasized that the law’s state-level framework must be designed to “preserve and promote State participation.”
The GENIUS Act creates a pathway for certain stablecoin issuers to be regulated by state authorities when the relevant state has laws that are largely consistent with the bill. The senators’ push comes after the Treasury sought public input on its planned approach for state certification earlier this year, signaling that procedural details may determine how quickly the state route can be used in practice.
Key takeaways
- Senators urged the Treasury to implement the GENIUS Act in a way that preserves and promotes state regulators’ supervisory role.
- The law allows state regulation for issuers tied to stablecoins with a market value of $10 billion or less, depending on state laws being largely similar.
- Senators said the Treasury’s proposal may not clearly address state certification timelines and procedures, potentially limiting future participation.
- The lawmakers highlighted that state legislatures move at different speeds, requiring a flexible certification process.
- Public comments on the Treasury proposal closed on June 2, and the department is expected to draft a final rule for publication in the Federal Register.
Why senators are focusing on state certification
The GENIUS Act, signed into law in July by President Donald Trump, is intended to regulate stablecoins and their issuers while keeping a place for state oversight. In their letter, the senators argued that Congress “clearly sought to preserve the dual banking system and the crucial role of State banking agencies in supervising this market.”
The lawmakers’ main concern is the operational design of the state pathway. They said the Treasury’s proposal did not adequately explain “the timeline and procedural requirements related to State certification.” According to the senators, this gap could create uncertainty for state authorities and may be interpreted as allowing a “one-time window” that would effectively prevent later certifications.
That distinction matters because state participation under the GENIUS Act depends on states passing or aligning rules—an inherently uneven process across the country. Senators noted that state legislatures differ in their schedules and capacity, making flexibility a practical necessity rather than a theoretical preference.
How the $10 billion threshold shapes who could qualify
Under the GENIUS Act, the state route hinges on whether the stablecoin’s market value is $10 billion or less and whether the state’s regulatory framework is largely similar to the bill. As a result, the threshold meaningfully narrows which issuers could fall into the category covered by state regulation.
Based on CoinGecko’s categorization of stablecoin market values, the market-value requirement would exclude most major issuers but not all. The article notes that Tether (USDt), USDC (USDC), and USDS (USDS), formerly Dai (DAI), are the only stablecoins that would clearly fall outside the $10 billion or less grouping, because the others appear to be above the threshold. (The implication is that only issuers connected to stablecoins meeting the $10 billion criterion could potentially seek state-level supervision under the act, subject to the state-law similarity requirement.)
This structure suggests that the state pathway is not designed as a universal substitute for federal approaches. Instead, it functions as a targeted option that depends both on stablecoin size and on each state’s willingness and ability to implement aligned rules.
Treasury’s proposal and the next step to final rules
Earlier, the Treasury sought public input on how it plans to implement the GENIUS Act’s state-level components. In April, the department requested comments on its approach for regulating stablecoin issuers through state certification, an initiative tied to the overall legislation signed in July.
According to the update described in the source, public comments on the Treasury’s proposal closed on June 2. From there, the department is expected to draft a final rule for publication in the Federal Register.
In the senators’ view, the remaining question is not whether states will be able to participate at all, but whether the certification mechanism is built in a way that remains usable over time. They argued that states should have the ability to develop regulatory regimes, seek certification, and adjust as market demand for stablecoin charters grows—especially as legislative schedules permit.
In their letter, the senators said: “States must be able to develop and seek certification of stablecoin regulatory regimes as demand for these charters materializes and as legislative schedules permit.” That language underscores their concern that procedural shortcuts—or unclear deadlines—could reduce state oversight to a theoretical option rather than a durable regulatory channel.
Who signed the letter and what to watch next
The letter was signed by Republican Senators Bill Hagerty, Kevin Cramer, and Pete Ricketts, alongside Democratic Senators Kirsten Gillibrand, Angela Alsobrooks, and Catherine Cortez Masto, in addition to Cynthia Lummis.
For market participants and regulators alike, the immediate takeaway is procedural: the final GENIUS Act implementation at the state level will likely turn on how the Treasury describes state certification timelines, requirements, and whether the framework can support future certifications as more states align their laws. Readers should watch for the Treasury’s final rule to clarify whether certification is strictly time-bounded or designed to accommodate ongoing state participation as new regulatory regimes are approved.
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