A bipartisan group of US senators led by Cynthia Lummis has sent a letter to Treasury Secretary Scott Bessent, urging the Treasury Department to preserve state-level regulatory authority over certain stablecoin issuers as it develops implementation rules for the GENIUS stablecoin law. The letter focuses on how state regimes will be treated within the federal framework and asks the Treasury to provide a clearer path for state systems to be recognized.
State authority under the GENIUS framework
The GENIUS Act was signed into law last year and established a federal regulatory framework for stablecoins in the United States. Under the law, stablecoins must be fully backed by US dollars or similarly highly liquid assets. Issuers with a market capitalization above $50 billion are required to undergo annual audits, and the law also sets rules for overseas issuance.
At the same time, the GENIUS Act leaves room for state-level supervision. Stablecoin issuers with a market capitalization of no more than $10 billion may be regulated at the state level, provided that the relevant state regulatory framework is “substantially similar” to federal requirements. The senators’ letter asks the Treasury to maintain this pathway while it writes the rules needed to implement the law.
Certification process and timing at issue
According to the senators, the Treasury’s earlier proposed rules did not clearly define the timeline and standards for state regulatory regimes to apply for, undergo review, and receive certification. The senators said this lack of clarity creates uncertainty for states, which need to know when applications can be filed, how they will be assessed, and what criteria will be used to determine whether a state framework is substantially similar to federal rules.
The letter also notes that legislative schedules differ widely from state to state. Some states operate on biennial legislative cycles, meaning that their ability to adjust laws or submit materials may not align with a fixed federal timeline. For that reason, the senators called for a flexible and continuously open certification mechanism that would allow states to seek certification when the need arises.
The senators argued that such a mechanism would prevent timing mismatches from limiting innovation and competition. Their request centers on ensuring that the GENIUS Act’s federal stablecoin framework does not eliminate the state-level channel that the statute itself permits for qualifying issuers.