Bipartisan Appeal for Clarity in State Regulatory Role

A coalition of U.S. senators from both major parties has formally communicated with the Department of the Treasury, advocating for the preservation of state authority as federal stablecoin regulations take effect under the recently enacted GENIUS Act.

The GENIUS Act and State-Level Provisions

Signed into law last year, the GENIUS Act establishes a federal framework for stablecoin oversight. Its key mandates include:

  • Full backing of stablecoins by the U.S. dollar or equivalent highly liquid assets;
  • Annual independent audits for issuers with a market valuation exceeding $50 billion;
  • Clear rules for stablecoins issued by foreign entities.
The legislation intentionally carves out a role for state regulators, permitting issuers with a market cap under $10 billion to operate under state supervision, provided the state's regulatory regime is "substantially similar" to federal standards.

The Central Issue: Ambiguity in Certification

The senators' letter identifies a critical gap in the Treasury's preliminary rulemaking: the lack of a defined timeline and specific criteria for states to apply for, receive review of, and obtain certification for their own regulatory frameworks. This ambiguity, they argue, creates uncertainty for states and could disincentivize the development of tailored digital asset policies at the local level.

Pushing for a Flexible and Ongoing Process

The communication highlights the practical challenge of differing state legislative calendars, with some states convening only biennially. A rigid federal certification window could create a mismatch, potentially locking states out of the process. The lawmakers urge the Treasury to implement a flexible and continuously open certification system. This would allow states to apply when ready, fostering innovation and maintaining competitive balance among jurisdictions.