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

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

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

The Act allows stablecoin issuers with a market cap 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 believe that the rules previously proposed by the Treasury Department did not specify the timeline and standards for the application, review, and certification of state regulatory regimes, creating uncertainty for states.

The letter notes that state legislative cycles vary significantly, with some states operating on a biennial legislative schedule. 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 constrained by mismatched timing.