The NCUA on Wednesday issued a Notice of Proposed Rulemaking outlining how entities may apply for approval to become a permitted payment stablecoin issuer under the recently enacted GENIUS Act.
The proposal would require any federally insured credit union seeking involvement in payment stablecoin issuance to do so through an NCUA-licensed subsidiary. Credit unions would not be permitted to issue stablecoins directly. Instead, stablecoin activity would occur through a legally distinct permitted payment stablecoin issuer (PPSI) subject to NCUA supervision.
"This proposed rule is the first step in NCUA's implementation of the GENIUS Act," Chairman Kyle Hauptman said in a statement. "We're on track to meet the Congress' July 18 deadline. Credit unions should be aware that they won't be at a disadvantage versus other entities, whether in timing or standards."
Under the proposed framework, applicants must demonstrate the ability to maintain 1:1 reserves backing outstanding stablecoins, adopt clear redemption policies and implement robust governance, risk management, cybersecurity and anti-money laundering controls. Officers and directors would undergo background checks and certain financial crime convictions could disqualify leadership.
The rule would also limit credit union investment in stablecoin activities to NCUA-licensed entities and allow joint applications from subsidiaries and controlling credit union parents.
Late Wednesday, America's Credit Unions President/CEO Scott Simpson released a statement concerning the NCUA's announcement.
"America's Credit Unions actively championed the inclusion of credit unions in the GENIUS Act, and we appreciate that today's stablecoin proposal reflects that work. Credit unions should have the same opportunity as any other federally regulated institution to participate in emerging payment systems.
"This proposal marks the first phase of implementing the GENIUS Act, and we are encouraged that the NCUA has addressed key questions regarding the role of credit union subsidiaries that may serve as stablecoin issuers. As we review the details, we look forward to providing feedback to ensure the application process is clear, timely and workable for credit unions of all sizes."
The proposal is available for review in the Federal Register, with comments due by April 13, 2026. The NCUA has also published additional guidance on its Financial Technology and Digital Assets Resource Page to clarify the rule's requirements.
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