US Senators Push Treasury to Protect State Role in Stablecoin Regulation

A bipartisan group of US senators has urged the Treasury Department to make sure states keep an active role in regulating stablecoin issuers under the GENIUS Act. The lawmakers said state regulators should have a fair opportunity to supervise smaller stablecoin companies as federal officials prepare new rules for the crypto sector.

The letter, led by Senator Cynthia Lummis, was sent to Treasury Secretary Scott Bessent on Tuesday. Senators argued that the law was designed to protect the country’s dual banking system and allow states to participate in digital asset oversight.

GENIUS Act Allows States to Regulate Smaller Stablecoins

Under the GENIUS Act, stablecoin issuers with a market value of $10 billion or less can operate under state supervision if the state has laws similar to the federal framework. At present, only major stablecoins including Tether’s USDT, Circle’s USDC, and USDS exceed that limit.

Lawmakers said the Treasury’s earlier proposal failed to clearly explain certification timelines for states. They warned that unclear rules could prevent states from joining the regulatory process in the future.

Treasury Preparing Final Stablecoin Rules

Public feedback on the Treasury proposal closed earlier this month, and officials are now preparing final regulations. Senators supporting the letter included Republicans Bill Hagerty, Kevin Cramer and Pete Ricketts, along with Democrats Kirsten Gillibrand, Angela Alsobrooks and Catherine Cortez Masto.