Bipartisan senators urge US Treasury to preserve state-level stablecoin regulatory authority under GENIUS Act

Odaily reported that a bipartisan group of senators led by Cynthia Lummis has sent a letter to U.S. Treasury Secretary Scott Bessent, urging the Treasury Department to maintain state-level regulatory authority over certain stablecoin issuers when formulating the implementation rules for the GENIUS Stablecoin Act.

The GENIUS Act was signed into law last year, establishing a federal stablecoin regulatory framework in the United States. It requires stablecoins to be fully backed by U.S. dollars or similar high-liquidity assets, mandates annual audits for issuers with a market capitalization exceeding $50 billion, and sets rules for overseas issuances.

The Act allows stablecoin issuers with a market capitalization not exceeding $10 billion to be regulated at the state level, provided that the relevant state regulatory regime is "substantially similar" to federal requirements. The senators argue that the Treasury's previously proposed rules did not clarify the timeline and standards for applying, reviewing, and certifying state regulatory regimes, creating uncertainty for states.

The letter points out that state legislative cycles vary significantly, with some states even adopting biennial legislative cycles. Therefore, a flexible and continuously open certification mechanism is needed to ensure that states can apply for certification when the need arises, rather than limiting innovation and competition due to timing mismatches.