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

Odaily Planet Daily News 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 preserve state regulatory authority over certain stablecoin issuers when formulating implementation rules for the GENIUS stablecoin bill.

The GENIUS Act, signed into law last year, establishes a federal stablecoin regulatory framework in the United States, requiring stablecoins to be fully backed by U.S. dollars or similar high-liquidity assets, and requiring issuers with a market capitalization exceeding $50 billion to undergo annual audits, while also setting rules for offshore issuance.

The bill 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 argued that the rules previously proposed by the Treasury Department did not specify the timeline and standards for the application, review, and certification of state-level regulatory regimes, creating uncertainty for states.

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