U.S. Senators Call for State Involvement in Stablecoin Regulation
A coalition of U.S. senators, comprised of members from both major political parties, has called on the Treasury Department to maintain state involvement in regulating stablecoins as it begins to implement the GENIUS Act. Spearheaded by Republican Senator Cynthia Lummis, this bipartisan group sent a letter to Treasury Secretary Scott Bessent to emphasize the importance of allowing state authorities to oversee stablecoin issuers.
The GENIUS Act Overview
The GENIUS Act, which President Donald Trump signed into law in July 2025, provides guidelines that permit state regulation of stablecoin issuers with a market capitalization capped at $10 billion, assuming the respective state laws closely align with the statute. Currently, this would primarily apply to all stablecoins, except for the three with values exceeding this threshold: Tether (USDt), USDC (USDC), and the formerly known Dai (DAI), now recognized as USDS, based on data from CoinGecko.
Concerns Raised by Senators
In their correspondence dated Tuesday, the senators underscored the necessity of implementing provisions that promote state engagement in this area while voicing concerns regarding the Treasury’s approach. They pointed out that the proposed regulatory framework failed to clarify the timeline and necessary procedures for state certification. This lack of clarity could lead to confusion, implying that certification might be a singular opportunity, thereby excluding states from future participation in the regulatory framework.
Bipartisan Support for Flexible Framework
The bipartisan assembly, which also included Republican Senators Bill Hagerty, Kevin Cramer, Pete Ricketts, and Democratic Senators Kirsten Gillibrand, Angela Alsobrooks, and Catherine Cortez Masto, advocated for a more flexible framework to enable state legislatures to adapt their regulatory regimes to cater to the evolving demands of the stablecoin market.
“States must be able to develop and pursue certification of stablecoin regulatory frameworks as interest grows and legislative calendars allow,” the letter addressed to Secretary Bessent stated.
Meanwhile, public comments regarding the Treasury’s proposed implementation strategy were accepted until June 2, and the agency will now work on finalizing the rules for publication in the Federal Register.
Conclusion
This development highlights the ongoing discussions around crypto regulation and the critical balance that needs to be struck between federal oversight and state governance in the emerging financial landscape.
