U.S. senators seek Treasury guidance on state stablecoin oversight under GENIUS Act

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Senators seek stablecoin guidance

Highlights

Senators led by Cynthia Lummis urged Treasury Secretary Scott Bessent to clarify and uphold state authority under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.
The GENIUS Act requires stablecoins to be fully backed by U.S. dollars or liquid assets, annual audits for issuers above $50 billion, and allows sub-$10 billion issuers to remain under state oversight if their regimes are federally comparable.
Lawmakers asked Treasury for clear, ongoing guidance on certifying state stablecoin regimes, as states like New York move to align regulations with the GENIUS Act.

Rulemaking focus on state certification

The Block reported that senators led by Cynthia Lummis sent a letter on Tuesday to Treasury Secretary Scott Bessent asking the department to uphold states' authority under the stablecoin law's implementation process.

The Guiding and Establishing National Innovation for U.S. Stablecoins Act, signed into law last year by President Donald Trump, creates a federal framework for stablecoins. It requires stablecoins to be fully backed by U.S. dollars or similarly liquid assets, mandates annual audits for issuers with a market capitalization above $50 billion, and sets guidelines for foreign issuance.

A key provision allows issuers with $10 billion or less to remain under state oversight if a state's regime is considered substantially similar to the federal standard. The senators said Treasury's April notice of proposed rulemaking lays out broad principles for that test but does not spell out a timeline or standards for state-regulated issuers, leaving states without enough clarity.

Implications for state regulators and crypto competition

The letter argues that states need an ongoing and flexible certification framework because legislative calendars vary and some operate on biennial cycles. The senators wrote that states must be able to develop and seek certification for stablecoin regimes as demand for such charters emerges, so innovation and competition are not limited by timing mismatches.

The lawmakers also asked Treasury to issue guidance clarifying how state applications, reviews and certifications would work in practice. Their request comes as some states continue refining their digital asset rules, and after the New York Department of Financial Services last week proposed a formal rule to align its stablecoin framework with the GENIUS Act.

The Treasury Department does not immediately respond to a request for comment.

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