By Ray Birch
MADISON, Wis.-- TruStage is stepping into the fast-moving stablecoin arena with a message to credit unions: participate — or risk watching deposits migrate elsewhere.
The company recently announced plans to launch TruStage Stablecoin (TSDA), a fully reserved U.S. dollar-backed digital token designed specifically for community-based financial institutions. In an interview, Brian Kaas, president and managing director of TruStage Ventures, said the move comes after months of closely studying the stablecoin market and the implications of the GENIUS Act, which he said provided long-awaited regulatory clarity.
“We’ve been really closely monitoring this stablecoin industry, especially over the last 12 months,” Kaas said. “When the GENIUS Act was signed into law last July, it really caused us to dig into the implications for the credit union system. The more we looked into it, the more we believed we had to have an industrywide solution.”
A Defensive — And Offensive — Strategy
At the heart of TruStage’s strategy is a concern that stablecoins could siphon deposits from credit unions if the industry does not offer a viable alternative. Consumers today can easily move funds to crypto exchanges or large fintech platforms offering stablecoin wallets. Without a credit union-backed option, Kaas warned, that migration could accelerate.
“If credit unions don’t have a viable option in market that they can offer to their members, those members can very easily move their accounts to other providers,” Kaas said. “They can move deposits with a credit union to a Coinbase account or other stablecoin platforms. This will become increasingly necessary for the industry to remain viable.”
Rather than see credit unions partner individually with large banks or crypto firms, TruStage believes a collaborative model can preserve both deposits and member relationships. TSDA is designed as a 1:1 cash-backed stablecoin, with reserves overseen by TruStage and issuance expected through a licensed affiliate, pending regulatory approvals.
Avoiding A ‘Fractured’ System
Kaas said TruStage does not want to discourage innovation by individual credit unions, but he expressed concern about “onesies and twosies” — isolated stablecoin launches that lack scale and interoperability.
“We need something that will have widespread acceptance for the stablecoin to be viable,” he said. “If you have individual credit unions issuing their own tokens, it becomes difficult for those stablecoins to be widely adopted. I’m concerned we end up with a very fractured system where none of those remain viable long term.”
Because TruStage works with more than 93% of the nation’s 4,300-plus credit unions — institutions collectively holding more than $2 trillion in assets — Kaas believes the company is uniquely positioned to create a network effect that individual institutions cannot achieve alone.
Built For The Movement
TSDA is being developed in partnership with Block Time Financial, which will provide blockchain infrastructure, security protocols and digital account capabilities. TruStage will act as issuer and manage reserves, which it said will be fully cash-backed.
Expected use cases go well beyond crypto speculation. TruStage envisions TSDA as a modern payment rail for settlements and disbursements among credit unions, faster loan funding, quicker participation settlements, lower-cost peer-to-peer payments, merchant transactions and cross-border payments — including for military members stationed abroad.
Kaas emphasized that the goal is not just technological relevance but financial stability for the system. Pending regulatory guidance, TruStage is exploring ways to structure the program so that deposits backing the stablecoin could potentially remain on credit union balance sheets, mitigating liquidity concerns.
“How do we get some of the deposits backing these stablecoins onto the books of credit unions?” he said. “That’s vitally important, and we plan to have a lot of conversations with regulators about that.”
A Race Against Time
TruStage hopes to secure necessary licensure under the GENIUS Act framework by the end of the year and is recruiting credit unions for an initial pilot launch in the first half of 2026. The rollout will begin with hosted wallets to allow institutions to participate without costly core integrations.
Kaas said the pace of adoption across the broader financial and technology sectors underscores the urgency. Large platforms are reportedly exploring stablecoin integrations, and he described the level of engagement around the technology as unprecedented in his career.
“If the credit union industry can unite behind an industrywide stablecoin, we have the opportunity to take something that could be a systemic threat and turn it into a strong positive,” Kaas said. “We can deepen member relationships and use this as a differentiator among financial institutions. But we need to unite quickly.”