Senators urge Treasury ensure state authority in GENIUS application

A bipartisan group of US senators urged the Treasury Department on March 13, 2024, to ensure its application of stablecoin laws preserves and promotes state authority. The senators, including Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY), sent a letter to Treasury Secretary Janet Yellen expressing concerns that the Treasury's approach to regulating stablecoins could preempt state-level licensing and oversight frameworks. They specifically referenced the Treasury's ongoing work on implementing the framework for stablecoin issuers, which was outlined in the President's Working Group on Financial Markets report in November 2022. The senators emphasized that existing state money transmission laws have successfully regulated financial services for decades and that any federal approach should complement, not supplant, these established systems. They called for clear guidance that delineates federal and state responsibilities, ensuring that state regulators can continue to play a vital role in overseeing stablecoin issuers operating within their jurisdictions. The letter highlighted the importance of maintaining a robust regulatory environment that fosters innovation while protecting consumers and financial stability, arguing that a collaborative federal-state approach is essential to achieving these goals.