Senators urge Treasury to protect state stablecoin authority

Senators urge the Treasury to protect state authority over stablecoin regulation under the GENIUS Act, seeking clear guidance and warning against federal overreach.

A bipartisan group of U.S. senators, led by Cynthia Lummis, is urging the Treasury Department to preserve state regulatory authority over stablecoins as it implements the GENIUS Act. This legislation, enacted last year, creates a federal framework for stablecoin oversight but permits issuers with a market cap of $10 billion or less to be regulated by states if their rules are "substantially similar" to federal standards. The senators expressed concern that the Treasury's proposed rules lack clarity on how states can demonstrate regulatory equivalence. They requested explicit guidance on the application, review, and certification processes for state-level regulations. Lawmakers warned that excessive federal intervention could undermine established state supervisory systems. They emphasized the importance of maintaining state participation, noting that states like New York have already begun aligning their regulations with the GENIUS Act.