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

Odaily Planet Daily Report A bipartisan group of senators led by Cynthia Lummis has sent a letter to US Treasury Secretary Scott Bessent, urging the Treasury Department to preserve state-level regulatory authority over certain stablecoin issuers when formulating implementation rules for the GENIUS stablecoin bill.

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

The bill allows stablecoin issuers with a market capitalization of no more than $10 billion to be regulated at the state level, provided the relevant state regulatory regime is “substantially similar” to federal requirements. The senators argue that the Treasury Department’s previously proposed rules did not specify the timeline and criteria for state regulatory regime applications, reviews, and certifications, creating uncertainty for states.

The letter notes that legislative cycles vary greatly among states, with some states even adopting a biennial legislative cycle. Therefore, a flexible and continuously open certification mechanism is needed to ensure that states can apply for certification when the need arises, rather than having innovation and competition restricted by mismatched timing.