The National Credit Union Administration has issued its first proposed rule under the Guiding and Establishing National Innovation for US Stablecoins Act, outlining how subsidiaries of federally insured credit unions could become licensed payment stablecoin issuers. The proposal establishes a new NCUA permitted payment stablecoin issuer license and defines the supervisory framework for entities operating within the credit union system.
The agency oversees more than 4,000 federally insured credit unions with approximately $2.38 trillion in assets. Under the draft rule, credit unions would be prohibited from investing in or lending to payment stablecoin issuers unless those entities hold the required license. Stablecoin activity would need to be conducted through separately supervised subsidiaries rather than directly on a credit union’s balance sheet.
Licensing Architecture Under GENIUS Act
The proposal focuses on licensing mechanics and investment restrictions, with additional rules expected to address reserve requirements, capital standards, liquidity and risk management. Notably, the NCUA would be barred from rejecting an application solely because a stablecoin operates on a public blockchain network. Once an application is deemed substantially complete, the agency would have 120 days to approve or deny it, after which it would be automatically approved if no action is taken.
Institutional and Regulatory Implications
The framework reflects a broader federal effort to standardize stablecoin oversight across banking and nonbank channels. By routing issuance through regulated subsidiaries, policymakers aim to balance innovation with prudential safeguards. The proposal remains subject to a 60-day public comment period before finalization.
For credit unions, the licensing path could provide a structured entry point into digital payments infrastructure while maintaining supervisory clarity. The move also signals continued federal coordination as stablecoins become more integrated into traditional financial services and settlement systems.
