A bipartisan group of U.S. senators has urged the Treasury Department to keep state regulators in the stablecoin rulemaking process as it prepares final GENIUS Act rules.
Summary
- Senators say Treasury must keep state stablecoin pathways open beyond a single certification window nationwide.
- The letter asks Treasury to clarify timelines before final GENIUS Act rules are published soon.
- State regulators are moving as stablecoin issuers prepare for federal and state oversight choices.
In a June 16 letter to Treasury Secretary Scott Bessent, the lawmakers said Section 4(c) of the GENIUS Act gives states a pathway to certify their own stablecoin regimes. The letter was led by Senator Cynthia Lummis and signed by Senators Kirsten Gillibrand, Bill Hagerty, Kevin Cramer, Pete Ricketts, Angela Alsobrooks, and Catherine Cortez Masto.
State pathway faces timing concerns
The senators said Congress wanted to preserve the dual banking system and the role of state banking agencies in supervising payment stablecoin issuers. They asked the Treasury to apply the law in a way that “preserves and promotes State participation.”
Their main concern is the certification process. The lawmakers said Treasury’s proposed principles did not address clear timelines or procedural steps for state certification. They said that gap creates uncertainty for states working on laws or rules to match the federal framework.
Meanwhile, the letter asked the Treasury to issue written guidance explaining how states can apply, how reviews will work, and when certification decisions will be made. The senators said the process should not be read as a “one-time window” that blocks future applications.
The lawmakers said state legislatures move on different schedules, and some meet only every two years. They argued that states must be able to seek certification when their own frameworks are ready, not only during an early federal rulemaking stage.
GENIUS Act gives smaller issuers a state option
The GENIUS Act allows payment stablecoin issuers with no more than $10 billion in outstanding issuance to choose state regulation if the state regime is substantially similar to the federal framework. Treasury said in April that the proposal was its first regulation to implement the law’s state-level regime.
That threshold leaves the state option aimed mainly at smaller issuers. The report said Tether’s USDt, USDC, and USDS were above $10 billion, while many smaller stablecoins could fall under state supervision if their regulators win certification under the final new federal process.
Rulemaking moves into final stage
Treasury opened public comments on the proposed state-level principles in April. The agency said comments were due within 60 days of publication in the Federal Register, placing the deadline in early June.
The senators’ letter arrived after the comment window closed, as Treasury prepares a final rule. They asked the department to confirm that certification remains available on an ongoing basis, rather than only during the first year of implementation.
The request also comes as Treasury works on separate GENIUS Act rules for illicit finance controls. That proposal would treat permitted payment stablecoin issuers as financial institutions for Bank Secrecy Act purposes and require sanctions compliance programs.
As previously reported by crypto.news, New York DFS has proposed stablecoin rule updates to align its framework with the GENIUS Act. The state said eligible issuers could stay under DFS supervision if New York receives federal certification.
Moreover, as crypto.news reported earlier, Hyperliquid and Paradigm also asked the Treasury to narrow proposed AML and sanctions duties for stablecoin issuers. State Street has also launched a stablecoin reserve money market fund designed for the GENIUS Act framework, while the FDIC faces GAO pressure over blockchain risk coordination.
