A bipartisan group of U.S. senators has called on Treasury Secretary Scott Bessent to provide immediate guidance on how states can qualify to regulate payment stablecoin issuers under the GENIUS Act, warning that regulatory uncertainty could undermine Congress’ vision for a state-federal oversight framework.
According to the letter posted on June 16, lawmakers argued that Treasury’s implementation of the legislation must preserve the role of state banking regulators and maintain the United States’ longstanding dual banking system.
The letter was signed by Senators Cynthia Lummis, Kirsten Gillibrand, Bill Hagerty, Pete Ricketts, Kevin Cramer, Catherine Cortez Masto, and Angela Alsobrooks.
The senators wrote that Congress sought to “preserve the dual banking system and the crucial role of State banking agencies in supervising this market.”
Treasury urged to clarify certification process
The senators focused on Section 4(c) of the GENIUS Act, which allows states to obtain certification if their regulatory frameworks are deemed substantially similar to federal stablecoin standards. The state route applies only to issuers whose stablecoins have a market value of $10 billion or less, which means the largest issuers, Tether, Circle’s USDC, and USDS, would remain under federal supervision.
While the Treasury has already released broad principles for evaluating state regimes, lawmakers said it has not yet explained how states can formally apply or how certification requests will be reviewed.
According to the letter, several stakeholders fear that without procedural clarity, the certification process could be interpreted as a limited-time opportunity that effectively prevents future state participation.
“We have heard from stakeholders that, absent clear procedural guidance, the certification process could be interpreted or applied in a manner that effectively forecloses future participation,” the senators stated.
The request comes as states increasingly prepare for stablecoin oversight under the new federal framework.
Earlier this month, New York proposed updated stablecoin regulations designed to align state supervision with evolving requirements under the GENIUS Act. The proposed framework introduces additional consumer protections, operational risk management standards, and oversight requirements aimed at maintaining New York’s position as a leading jurisdiction for digital asset innovation.
The senators noted that many states are currently considering legislation or regulatory updates, making Treasury’s guidance especially important for jurisdictions still developing their frameworks.
States need flexibility, lawmakers say
The lawmakers argued that state legislative schedules vary significantly and that some jurisdictions operate on biennial legislative cycles, making it unrealistic to expect all states to meet a single certification deadline.
“States must be able to develop and seek certification of stablecoin regulatory regimes as demand for these charters materializes and as legislative schedules permit,” the senators wrote.
They warned that treating certification as a one-time approval window would reduce competition, limit innovation, and undermine Congress’ intent to preserve regulatory optionality.
The senators also pointed to the GENIUS Act’s annual recertification requirement as evidence that Congress envisioned certification as a continuing process rather than a one-time event.
“The GENIUS Act’s inclusion of an annual recertification requirement further supports the conclusion that certification is intended to function as a continuing process and partnership between Federal and State authorities,” the letter stated.
According to the lawmakers, the Treasury should implement the law in a manner that supports long-term cooperation between federal and state regulators.
Stablecoin competition continues to grow
The debate arrives as stablecoin regulation becomes one of the most significant policy issues in the digital asset industry.
With states such as New York and many others actively updating their frameworks and lawmakers pushing for greater regulatory clarity, the next phase of GENIUS Act implementation could determine how much influence state regulators retain over the future of the U.S. stablecoin market.
The senators concluded by urging Treasury to formally confirm that certification opportunities will remain available on an ongoing basis, ensuring states can continue participating in the supervision of payment stablecoin issuers as the industry evolves.
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