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Seven bipartisan senators, led by Cynthia Lummis, urged Treasury Secretary Scott Bessent on Tuesday to preserve state authority over stablecoin issuers with $10 billion or less in circulation, warning that the agency's April notice of proposed rulemaking left a critical gap: no timeline and no standards for state regimes to win "substantially similar" certification under the GENIUS Act. The letter was signed by Lummis (R-Wyo.), Kirsten Gillibrand (D-N.Y.), Pete Ricketts (R-Neb.), Catherine Cortez Masto (D-Nev.), Kevin Cramer (R-N.D.), Angela Alsobrooks (D-Md.), and Bill Hagerty (R-Tenn.).
Why it matters
GENIUS, signed by President Trump last year, created the first major federal framework for stablecoins, requiring full dollar-or-liquid-asset backing, annual audits for issuers above $50 billion in market cap, and guidelines for foreign issuance. Its compromise architecture handed smaller issuers — those at or below $10 billion — to state regulators, on the condition that a state's rules are "substantially similar" to the federal floor. New York's Department of Financial Services already moved last week to align its BitLicense-era framework with the new law, adding reserve caps to its existing regime. But Treasury's April NPRM offered only broad principles for what "substantially similar" means, leaving states without a clear path to certification and smaller issuers without a clear path to market entry.
Market impact
The senators' framing — that "state legislative processes vary significantly, and in some cases operate on biennial cycles" — puts a clock on Treasury that didn't exist in the original rulemaking. Without an ongoing, flexible certification framework, the federal-state partnership GENIUS was sold on collapses into a single federal track dominated by OCC-supervised national trust banks. Watch for Treasury's response and any forthcoming guidance on application review; smaller issuers and state-chartered trust companies are the constituency with the most to gain or lose from how Bessent resolves the timeline question.
Frequently asked questions
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What did the senators ask Treasury to do under the GENIUS Act?
Seven bipartisan senators, led by Cynthia Lummis, asked Treasury Secretary Bessent to issue guidance clarifying the application, review, and certification process for state stablecoin regimes under GENIUS, and to maintain an ongoing, flexible certification framework rather than a one-shot window.
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Why does state authority matter under the GENIUS Act?
GENIUS allows stablecoin issuers with $10 billion or less in circulation to be regulated by states whose regimes are "substantially similar" to the federal floor. Without clear certification standards and timelines, that pathway is effectively closed and smaller issuers are forced onto the federal track only.
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Which senators signed the letter to Treasury?
Cynthia Lummis (R-Wyo.), Kirsten Gillibrand (D-N.Y.), Pete Ricketts (R-Neb.), Catherine Cortez Masto (D-Nev.), Kevin Cramer (R-N.D.), Angela Alsobrooks (D-Md.), and Bill Hagerty (R-Tenn.).
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What did Treasury's April notice of proposed rulemaking leave undefined?
The April NPRM offered broad principles for what makes a state regime "substantially similar" to GENIUS's federal provisions, but did not address the timeline or standards for stablecoin issuers to be regulated by states — the gap the senators' letter is targeting.
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How has New York's regulator responded to GENIUS so far?
The New York Department of Financial Services proposed a formal rule last week to align its existing stablecoin framework with GENIUS, adding reserve limits to its BitLicense-era regime — the most concrete state-level alignment effort publicly visible so far.
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