NCUA proposes stablecoin licensing for credit union subsidiaries
The United States National Credit Union Administration (NCUA) released its first proposed rules under the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, outlining a federal licensing framework for payment stablecoin issuers operating through subsidiaries of federally insured credit unions. You can find more about this on the NCUA’s official press release.
The NCUA, which supervises more than 4,000 federally insured credit unions serving roughly 144 million members and about $2.38 trillion in assets as of mid-2025, said the proposal defines the application process and standards for such licensing.
Under the draft rule, any payment stablecoin issuer that is a “subsidiary of an insured credit union” would be required to obtain an NCUA permitted payment stablecoin issuer (PPSI) license before issuing coins.
Federally insured credit unions would also be barred from investing in or lending to payment stablecoin issuers unless those issuers hold an NCUA PPSI license.
The current proposal is limited to licensing mechanics and investment restrictions. A subsequent rulemaking is expected to implement GENIUS Act standards for PPSIs, including requirements for reserves, capital, liquidity, illicit finance controls, and information technology risk management. “A forthcoming proposal will propose regulations to implement the standards and restrictions imposed by the GENIUS Act on PPSIs,” the preamble states. The proposal can be read in full on the NCUA’s website.
At this stage, the focus is on establishing the licensing and supervisory structure. Any future rollout of stablecoin services to members would depend on later approvals and additional standards. For more upcoming events related to the cryptocurrency world, consider attending events like the Blockshow.
Public blockchain neutrality and 120‑day decision timeline
The proposal specifies that the NCUA may not deny a substantially complete application solely because a stablecoin would be issued “on an open, public, or decentralized network,” preventing rejections based on the choice of a public blockchain alone.
Once an application is deemed “substantially complete,” the agency would have 120 days to approve or deny it. If the NCUA does not act within that period, the application would be “deemed approved” by default.
The proposal also reflects a core GENIUS Act feature: insured depository institutions, including credit unions, cannot issue payment stablecoins directly and instead must use separately supervised subsidiaries that meet uniform federal standards. For credit unions, this generally means conducting activity through credit union service organizations and other qualifying entities under NCUA jurisdiction as “subsidiaries of an insured credit union.”
The document is a notice of proposed rulemaking. Stakeholders will have 60 days from its publication in the Federal Register to submit comments before the NCUA finalizes or revises the licensing framework. You can share your thoughts on the proposal via social media platforms such as Facebook or Twitter.
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