Senators urge Treasury to preserve state stablecoin oversight under GENIUS Act

Seven bipartisan U.S. senators asked the Treasury Department to preserve states' ability to regulate certain stablecoin issuers under the GENIUS Act, saying draft implementing rules do not clearly define the schedule or procedures for certifying state regulatory regimes. In a letter sent on the 16th to Treasury Secretary Scott Bessent, the lawmakers said Treasury's proposed rule does not spell out timelines or standards for deciding when a state regime is "substantially similar" to the federal framework, leaving states uncertain about how to qualify. The GENIUS Act created a national framework for stablecoins and requires issuers to hold full backing in U.S. dollars or similarly liquid assets. It also mandates annual audits for issuers with a market capitalization of more than $50 billion and sets guidelines for foreign issuance. Under one provision, issuers with $10 billion or less can remain under state supervision if the state's rules closely match the federal standard. The senators said that flexibility matters because state legislative calendars differ, with some operating on biennial cycles, and warned that a rigid or unclear certification process could constrain innovation and competition. They urged Treasury to provide guidance on the application, review and certification process for state regimes. The signatories include Senator Cynthia Lummis, chair of the Senate Banking Committee’s crypto subcommittee.