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Key Takeaways
- Treasury’s April stablecoin principles failed to address timelines or procedures for states seeking certification under the GENIUS Act, leaving states without a defined path forward
- Seven bipartisan senators warned Bessent that unclear guidance could be applied in a way that effectively forecloses state participation in the certification process
- The senators are calling for written guidance that includes clear timelines and accounts for differences in how individual state legislatures can enact stablecoin regulations
A bipartisan group of U.S. senators led by Republican Cynthia Lummis urged the Treasury Department to provide states with a clear and explicit process for demonstrating that their stablecoin regulatory frameworks meet federal standards under the GENIUS Act. The letter warns that Treasury’s existing proposals left states without adequate procedural guidance, creating uncertainty that could foreclose their participation in the certification process.
Treasury’s April Stablecoin Proposal Did Not Address State Certification Timelines or Procedures
The GENIUS Act is currently being translated into regulations across several federal financial agencies, including the Treasury Department, which published proposed stablecoin principles in April. But the senators said those proposals fell short on a critical point.
“Treasury’s finalized principles for assessing whether state regimes are substantially similar to the federal regulatory framework are critical in this process,” the letter states. “The proposed principles were published by Treasury but did not address the timeline and procedural requirements related to state certification.”
The letter was also signed by Republicans Bill Hagerty of Tennessee, Kevin Cramer of North Dakota, and Pete Ricketts of Nebraska, and Democrats Kirsten Gillibrand of New York, Angela Alsobrooks of Maryland, and Catherine Cortez Masto of Nevada.
Senators Warn Unclear Guidance Could Foreclose State Participation
The lawmakers said they have heard directly from stakeholders that the absence of procedural clarity poses a concrete risk to state involvement. The senators wrote to Treasury Secretary Scott Bessent:
“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.”
Lummis chairs the Senate Banking Committee’s crypto subcommittee and was among the lawmakers who played a prominent role in negotiating the GENIUS Act.
Lawmakers Ask Treasury for Written Guidance With Clear Timelines and Flexibility for State Legislatures
The senators are now calling on Treasury to produce written procedural guidance that clarifies the application, review, and certification process for state regimes. They specified that the guidance must include clear timelines and requirements, and account for differences in how and when individual state legislatures can enact or amend stablecoin regulations. The senators said states developing their own stablecoin regulatory frameworks currently have no defined path forward in the federal certification process.
