ALEXANDRIA, Va.—A sweeping new NCUA proposal to implement the GENIUS Act could open the door for credit union-backed stablecoin issuance, but only through separately licensed subsidiaries operating under an extensive new federal regulatory framework that limits risks to the Share Insurance Fund.
The 269-page supplemental proposed rule issued Friday lays out how “permitted payment stablecoin issuers” affiliated with federally insured credit unions would be supervised, examined and regulated by the NCUA, while also establishing rules covering reserves, liquidity, custody, operational risk, cybersecurity, anti-money laundering compliance and disclosure standards.
The proposal supplements an earlier February 2026 proposal by the agency focused primarily on licensing and investments in stablecoin issuers.
Federally insured credit unions themselves would still be prohibited from directly issuing payment stablecoins under the GENIUS Act. Instead, issuance would have to occur through a separately organized credit union subsidiary or CUSO that receives NCUA approval as a licensed payment stablecoin issuer.
The proposal also makes clear the NCUA intends to align much of its framework with rules being developed by the OCC and other federal regulators, an effort aimed at creating consistent national standards for stablecoin issuers regardless of charter type. Throughout the proposal, the agency repeatedly notes it is attempting to adapt banking-centric language in the GENIUS Act to the credit union system while maintaining parity with other federal regulators.
For credit unions, one of the most important provisions may be the treatment of reserves backing stablecoins. The proposal would allow licensed issuers to hold reserves in share accounts at federally insured credit unions, potentially creating a new source of deposits and liquidity tied to stablecoin activity.
The proposal additionally signals the NCUA expects significant operational and compliance oversight for any credit union affiliated issuer. Licensed issuers would face ongoing examinations, reserve disclosure requirements, custody standards for stablecoin reserves and private keys, and strict governance reviews of directors, officers and principal shareholders. The agency also notes it is updating its examiner guidance and supervision manuals to oversee these entities as stablecoin operations evolve.
The supplemental proposal represents a major expansion of the NCUA’s role into digital asset supervision and reflects the broader transformation underway following passage of the GENIUS Act in 2025. In announcing its initial February proposal, NCUA Chairman Kyle Hauptman said the agency wanted to ensure credit unions would not be placed “at a disadvantage versus other entities, whether in timing or standards.”
CU Trade Groups Respond
The Defense Credit Union Council said it appreciates that NCUA has published a second proposed rule implementing the requirements of the GENIUS Act for credit unions.
"We are currently conducting a thorough review of the comprehensive proposal and engaging directly with our member credit unions to assess its potential operational, regulatory, and consumer impacts," said DCUC Chief Advocacy Officer Jason Stverak. "This proposal addresses a wide range of critical issues, including consumer protections, marketing and disclosure requirements, risk management standards, examination procedures, and capital considerations. We appreciate the NCUA’s efforts to maintain regulatory consistency and parity with the federal banking agencies as this framework develops.
"However, as with any proposal of this scope and complexity, the details matter tremendously," continued Stverak. "DCUC will carefully analyze every provision to ensure the final rule preserves credit unions’ ability to innovate, compete fairly, and continue serving military communities, veterans, and their families without unnecessary regulatory burden."
Kathleen Coulombe, America's Credit Unions chief advocacy officer, termed NCUA's latest proposal a "positive step."
"We appreciate the NCUA's willingness to offer a clarifying statement on the permissibility of offering tokenized shares," stated Coulombe. "As trusted financial partners, credit unions are poised to support innovation and adoption within the digital assets marketplace. The NCUA's implementation approach must provide flexibility while reinforcing the agency's commitment to providing credit unions with regulatory clarity."