U.S. bipartisan senators urge the Treasury Department to uphold states' regulatory authority over stablecoins under the GENIUS Act

According to The Block, a bipartisan group of lawmakers led by U.S. Senator Cynthia Lummis has written to the Treasury Department, requesting the maintenance of states' authority to regulate stablecoins under the GENIUS Act. The act allows stablecoin issuers with a market capitalization of no more than $10 billion to be regulated by states, provided that state-level rules are "substantially similar" to federal rules. The Treasury Department released proposed rules in April, suggesting broad principles for determining whether state systems are "substantially similar," but did not clarify the timeline and standards for state regulation. The senators stated in their letter that the lack of clarity "creates uncertainty for the states," and therefore requested the Treasury Department to issue guidance that clarifies the application, review, and certification processes for state systems. The New York State Department of Financial Services proposed formal rules last week to align its stablecoin framework with the GENIUS Act.