A group of bipartisan senators led by Sen. Cynthia Lummis pressed the Treasury Department to preserve states' ability to regulate stablecoins as it writes rules implementing a stablecoin bill passed into law last year.
President Donald Trump signed into law the Guiding and Establishing National Innovation for U.S. Stablecoins, or GENIUS, as it's more commonly known, which created a federal regulatory framework for stablecoins. The law requires stablecoins to be fully backed by U.S. dollars or similarly liquid assets, mandates annual audits for issuers with a market capitalization of more than $50 billion, and establishes guidelines for foreign issuance.
One section of the bill, the topic of the letter sent on Tuesday to Treasury Secretary Scott Bessent, allows stablecoin issuers with $10 billion or less to be regulated by states as long as that state's rules are "substantially similar" to what the federal government has in place. Some states, like New York, have comprehensively developed rules for digital assets and stablecoins over the years.
In April, the Treasury Department issued a notice of proposed rulemaking to implement GENIUS, in which it proposed broad-based principles for determining whether a state-level regulatory regime is "substantially similar" to provisions in GENIUS. Last week, the New York Department of Financial Services proposed a formal rule to align its stablecoin framework with the GENIUS Act.
