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

A bipartisan group of senators led by Cynthia Lummis has written to U.S. Treasury Secretary Scott Bessent, requesting that the Treasury maintain states' 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, requiring that stablecoins be fully backed by U.S. dollars or similar high-liquidity assets, and mandating that issuers with a market capitalization exceeding $50 billion undergo annual audits, while also setting rules for offshore issuance.

The bill allows stablecoin issuers with a market capitalization of no more than $10 billion to be regulated at the state level, as long as the relevant state regulatory systems are "substantially similar" to federal requirements. The senators believe that the rules previously proposed by the Treasury do not clearly outline the timeline and standards for state regulatory system applications, reviews, and certifications, creating uncertainty for the states. The letter points out that there are significant differences in legislative cycles across states, with some states even adopting a biennial legislative cycle, thus requiring a flexible and continuously open certification mechanism to ensure that states can apply for certification when demand arises, rather than being constrained by timing mismatches that limit innovation and competition.