Senators Cynthia Lummis, Kirsten Gillibrand, and Bill Hagerty sent a letter to Treasury Secretary Scott Bessent on June 16 requesting clarity on how states can qualify to supervise payment stablecoin issuers under the GENIUS Act. The lawmakers argued that smaller issuers should not be forced into a fully centralized federal oversight model and emphasized Congress's intent to preserve the country's dual banking system. The letter arrives as implementation of the GENIUS Act enters a critical phase, marking one of the most significant stablecoin regulation updates in the United States this year.
Senators Request Four Procedural Clarifications from Treasury
Under the GENIUS Act, stablecoin issuers with less than $10 billion in assets may operate under state supervision if their regulatory frameworks are deemed "substantially similar" to federal standards. Larger issuers would remain under direct federal oversight. Currently, only a handful of major stablecoins, including Tether's USDT, Circle's USDC and USDS, exceed the $10 billion threshold.
In their letter, the senators requested Treasury provide:
- Clear application and certification procedures for states
- Defined review timelines
- An ongoing certification process rather than a one-time approval window
- Flexibility for states with varying legislative schedules
According to the lawmakers, failure to provide procedural guidance could discourage innovation and limit future state participation in the growing stablecoin sector.
Dual Banking System Debate Centers on State Authority
The issue highlights a policy question shaping digital asset regulation: should oversight be concentrated in Washington, or should states retain authority to foster competition and innovation? Supporters of the state-based model argue that local regulators have historically played an important role in financial oversight and can respond more quickly to emerging technologies.
They also believe a competitive regulatory environment could encourage new entrants into the stablecoin market while maintaining strong consumer protections. The discussion arrives amid increasing institutional interest in stablecoins, with financial firms preparing products designed to comply with the new regulatory framework.
Lummis Advocates for CLARITY Act Alongside GENIUS Act
The latest development intersects with ongoing efforts surrounding the CLARITY Act, another major digital asset bill moving through Congress. Sen. Cynthia Lummis has been one of the legislation's strongest advocates, arguing that clearer rules are necessary for innovation and consumer protection. The bill would divide oversight responsibilities between the SEC and CFTC while providing legal certainty for developers, stablecoin issuers and decentralized finance projects.
Recent statements from Lummis emphasized that the CLARITY Act would introduce modern disclosure standards, support self-custody rights and allocate additional resources to law enforcement agencies investigating crypto-related fraud.
As lawmakers continue negotiations on the GENIUS Act and CLARITY Act, the outcome could significantly shape the future of U.S. digital asset regulation.
FAQ
What did Senators Lummis, Gillibrand, and Hagerty request from Treasury Secretary Bessent on June 16?
The senators sent a letter requesting clarity on how states can qualify to supervise payment stablecoin issuers under the GENIUS Act. They asked for clear application and certification procedures, defined review timelines, an ongoing certification process, and flexibility for states with varying legislative schedules.
What is the $10 billion asset threshold in the GENIUS Act?
Under the GENIUS Act, stablecoin issuers with less than $10 billion in assets may operate under state supervision if their regulatory frameworks are deemed "substantially similar" to federal standards. Larger issuers remain under direct federal oversight. Currently, only a handful of major stablecoins, including Tether's USDT, Circle's USDC and USDS, exceed this threshold.
