A bipartisan group of U.S. senators, led by Cynthia Lummis, has formally asked the Treasury Department to ensure state regulators retain a meaningful role in overseeing stablecoin issuers as it implements the GENIUS Act. The letter, sent to Treasury Secretary Scott Bessent on Tuesday, warns that the rulemaking process risks sidelining state frameworks that have long governed money transmission and digital asset activity.
The GENIUS Act, signed into law by President Donald Trump, establishes a federal regulatory framework for stablecoins, requiring full backing by U.S. dollars or similarly liquid assets, annual audits for issuers over $50 billion in market cap, and guidelines for foreign issuance. A key provision allows issuers with $10 billion or less to be regulated by states if their rules are 'substantially similar' to federal standards. Treasury opened a comment period in April 2026 with a notice of proposed rulemaking to define those principles, but the senators say it lacked clarity on timelines and standards for state certification, creating 'uncertainty for States.'
The letter, also signed by Senators Kirsten Gillibrand, Pete Ricketts, Catherine Cortez Masto, Kevin Cramer, Angela Alsobrooks, and Bill Hagerty, insists on a flexible, ongoing certification framework to accommodate varying state legislative schedules, including biennial cycles. 'States must be able to develop and seek certification of stablecoin regulatory regimes as demand for these charters materializes,' they wrote, pushing for guidance clarifying the application, review, and certification process.
Stablecoin issuers currently licensed under state money transmitter laws—such as those in New York with its comprehensive BitLicense regime and Wyoming with its digital asset charter—could be forced into a single federal chartering regime if Treasury sets an overly high bar. State regulators, through the Conference of State Bank Supervisors, have actively advocated for standards recognizing existing state capabilities. Last week, the New York Department of Financial Services proposed a rule to align its stablecoin framework with the GENIUS Act, signaling how states are positioning themselves.
The outcome will shape the stablecoin landscape as adoption grows, with implications for issuers like those behind USDT and USDC. Industry players, including State Street with its GENIUS Act-aligned stablecoin reserve fund, are already adapting. Treasury has not yet responded to the senators’ request.
