A bipartisan group of senators led by Cynthia Lummis has sent a letter to US 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 act. The senators’ request centers on how the federal framework will treat issuers that fall within the size range eligible for state supervision.
The GENIUS Act’s Federal Stablecoin Framework
The GENIUS Act was signed into law last year and created a federal regulatory framework for stablecoins in the United States. Under the law, stablecoins must be fully backed by the US dollar or similarly highly liquid assets. Issuers with a market capitalization of more than $50 billion are required to undergo annual audits, and the law also sets rules for offshore issuance.
The act also includes a state-level pathway. Stablecoin issuers with a market capitalization of no more than $10 billion may be regulated at the state level, provided the relevant state regulatory system is “substantially similar” to federal requirements. In their letter, the senators argued that the Treasury’s implementation rules should make this pathway clear and workable for states seeking recognition under the law.
Call for Clear Certification Standards and Timelines
The senators said the Treasury’s previously proposed rules did not clearly define the timeline or standards for state regulatory systems to apply for, undergo review, and receive certification. According to the letter, that lack of clarity creates uncertainty for states as they consider how to align their own regimes with the federal framework.
The letter also noted that legislative cycles differ significantly from state to state. Some states use biennial legislative sessions, meaning they do not update laws every year. The senators said this makes a flexible and continuously open certification mechanism necessary, so that states can apply for certification when the need arises rather than being constrained by mismatched timing.
By asking the Treasury to maintain an open certification process, the senators are seeking to ensure that state regimes meeting the “substantially similar” standard can be recognized without unnecessary procedural barriers. The letter frames the issue as one of preserving the role of state regulators within the federal stablecoin structure established by the GENIUS Act, while avoiding limits on innovation and competition caused by timing conflicts in the certification process.