Lummis-led senators warn Treasury's vague stablecoin rules could freeze states out

The U.S. Treasury dropped a stablecoin rulemaking proposal in April that omitted the one thing state regulators needed: a concrete process to prove they can play in the same sandbox as federal overseers. Senator Cynthia Lummis and four other lawmakers from both parties sent a letter Tuesday telling Treasury Secretary Scott Bessent to fix that gap before the GENIUS Act implementation stalls.

The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act explicitly allows state-level oversight of stablecoin issuers - provided the state can demonstrate its supervision is "substantially similar" to the federal framework. But as Lummis, Angela Alsobrooks, Catherine Cortez Masto, Kirsten Gillibrand, and their Republican colleagues point out, Treasury's proposed principles say nothing about the timeline or procedural steps a state must follow to get that certification.

Treasury's missing playbook leaves state regulators guessing

The senators' letter is blunt: "The proposed principles were published by Treasury but did not address the timeline and procedural requirements related to state certification." That vagueness isn't just sloppy drafting - it actively threatens the dual-track federal-state model the GENIUS Act envisioned. State legislatures operate on wildly different calendars, and without a clear application window or review criteria, they cannot plan their own legislative moves on stablecoin oversight.

I've watched enough regulatory rollouts to know that ambiguity in a certification process is a feature, not a bug, when a federal agency wants to centralize control. The lawmakers clearly see it too: they warn that "absent clear procedural guidance, the certification process could be interpreted or applied in a manner that effectively forecloses future participation."

What the senators want: deadlines, flexibility, and a paper trail

The ask is specific. Lummis and her colleagues demand "written procedural guidance clarifying the application, review, and certification process for state regimes," with "clear timelines and requirements" that accommodate the diversity of state legislative calendars. This isn't a request for more study or another comment period - it's a demand for executable process documentation.

These same senators have been deep in the crypto policy weeds for years, including the still-lingering Digital Asset Market Clarity Act. They know that if Treasury drags its feet or buries state certification in informal back-channel negotiations, stablecoin issuers will default to federal charters and the state experimentation that crypto proponents tout will never materialize.

Treasury's next move - whether it publishes a transparent certification playbook or lets the ambiguity fester - will determine whether the GENIUS Act delivers the promised dual regulatory track or becomes another Washington monopoly. The letter gives Bessent a clear path; ignoring it would confirm what many already suspect about the real intent behind those vague principles.

Source: U.S. senators urge Treasury not to leave states out of GENIUS Act stablecoin process
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