Lummis, Bipartisan Senators Urge Treasury to Preserve State Authority in Stablecoin Rules

A bipartisan group of U.S. senators led by Cynthia Lummis urged the Treasury Department to preserve states' supervisory authority as stablecoin regulations are implemented.

The Block reported on June 16 that Lummis, Kirsten Gillibrand and Bill Hagerty sent a letter to Treasury Secretary Scott Bessent arguing that states should retain a role in the stablecoin regulatory framework.

The U.S. enacted the GENIUS Act, a stablecoin bill, last year. The law requires issuers to hold reserves equal to 100% of outstanding tokens in dollars or similarly liquid assets. It also mandates regular audits for issuers with market capitalizations of at least $50 billion.

The law also allows stablecoin companies with issuance of $10 billion or less to remain under state supervision if a state has an oversight regime that is substantially similar to federal regulation. Some jurisdictions, including New York, already have regulatory frameworks for digital assets and stablecoins.

The senators said a recent Treasury draft implementing order omitted specific details on state certification procedures, review standards and timelines.

In the letter, the senators wrote that a durable and flexible certification framework is needed so states can establish stablecoin regulatory systems and apply for certification. They added that a uniform timeline could limit innovation and competition because state legislative calendars differ and some legislatures meet every other year.

They also asked the Treasury Department to provide clear guidelines for how state regulatory frameworks would be submitted, reviewed and certified.

Separately, the New York State Department of Financial Services recently proposed rule revisions to align its existing stablecoin oversight framework with the GENIUS Act. The division of regulatory authority between the federal government and the states stands to become a key issue for the U.S. stablecoin industry.