Industry leaders urge regulators to ensure equitable access as the NCUA moves to implement the GENIUS Act and define the role of digital assets in the financial system.

Credit unions are pressing federal regulators to adopt flexible policies that would allow them to participate more fully in the emerging stablecoin market, as the National Credit Union Administration moves to implement landmark legislation governing digital payment tokens.

In response to the NCUA’s first proposed rule under the Guiding and Establishing National Innovation for U.S. Stablecoins Act, known as the GENIUS Act, America’s Credit Unions this week recommended that the agency consider approaches designed to broaden participation across institutions of all sizes. The proposal outlines the approval and licensure process for permitted payment stablecoin issuers, or PPSIs, subject to the NCUA’s jurisdiction.

The GENIUS Act, approved by Congress in 2025, established the nation’s first federal regulatory framework for payment stablecoins — digital assets designed to maintain a stable value by being tied to traditional currencies such as the U.S. dollar. Federal agencies are required to complete rulemaking under the law by July 18.

“This proposed rule is the first step in NCUA’s implementation of the GENIUS Act,” NCUA 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.”

The Notice of Proposed Rule Making, released in February, details requirements for entities seeking PPSI designation. Applicants must demonstrate financial health, sound management and viable business plans. Federal credit unions issuing stablecoins through subsidiaries would be required to do so via credit union service organizations, or CUSOs, and must primarily serve credit union members.

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The agency has proposed a 120-day timeline for application decisions, followed by a certification requirement within 180 days and annually thereafter to confirm compliance with anti-money laundering and economic sanctions regulations.

Industry leaders welcomed the proposal while urging regulators to refine certain provisions. Andrew Morris, director of innovation and technology at America’s Credit Unions, voiced support for clarifications around joint applications for licensed PPSIs. He suggested that, in the near term, credit unions are more likely to participate through industry consortia backing larger issuers rather than launching individual white-label stablecoins.

To align with congressional intent, Morris recommended that the NCUA allow federal credit unions to invest in PPSI subsidiaries distinct from traditional CUSOs and tailor regulatory requirements to reflect the unique nature of stablecoin activities.

The trade association also proposed clarifying that reserves pledged by owner credit unions would not count toward the existing 1% cap on CUSO investments. Additional recommendations included guidance for institutions engaged in custodial services without issuing stablecoins, clearer rules governing mixed-ownership PPSIs, and enhanced coordination with other federal regulators.

The letter cautioned against discretionary evaluation criteria — such as market strength and profitability expectations — that could disadvantage smaller credit unions or limit consortium participation. Morris further urged regulators to align timelines with other federal agencies to ensure a coordinated rollout of the GENIUS Act.

The proposal has drawn praise from industry advocates who have long sought equal access to emerging financial technologies.

“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,” said Scott Simpson, the group’s president and chief executive. “Credit unions should have the same opportunity as any other federally regulated institution to participate in emerging payment systems.”

Simpson added that the organization would continue working with regulators to ensure the application process remains “clear, timely, and workable for credit unions of all sizes.”

Stablecoins have circulated for years as a potentially faster and cheaper alternative to traditional electronic payments. Under the GENIUS Act, however, only approved entities may issue them, establishing federal guardrails intended to promote innovation while safeguarding financial stability.

For smaller institutions that have watched larger banks experiment with digital assets, the proposed rule signals both opportunity and heightened scrutiny. As regulators define how stablecoins will fit into the traditional financial system, credit unions are seeking assurances that they will have a meaningful role in shaping the future of digital finance.

The NCUA’s proposed rule was published in the Federal Register, with a public comment period that closed on April 13. Final regulations are expected ahead of the July deadline.

“The NCUA should further address several issues necessary for promoting parity between credit unions with other financial institutions permitted to issue stablecoins, including increased flexibility in investing in subsidiaries that are not CUSOs and providing clarity around several open questions that will impact the success of credit unions in the digital asset industry and the future of finance.”

– Andrew Morris
Director of Innovation & Technology
America’s Credit Unions