NCUA advances implementation of the GENIUS Act

The National Credit Union Administration has forwarded a proposal to regulate stablecoin activity within the US credit union system. The new rules are slated to advance the implementation of the bill-turned-law, the GENIUS Act.

The NCUA issued a Notice of Proposed Rulemaking explaining how entities could apply for approval as permitted payment stablecoin issuers, or PPSIs, under its supervision. The proposal formally brings stablecoin-related operations into the agency’s regulatory framework for the first time.

US credit union issues framework for stablecoin lending

In a press statement on Wednesday, the credit regulator said the authority granted by Congress through the GENIUS Act establishes adequate standards for stablecoin issuance by federally insured credit unions.

NCUA also mentioned that public comments on the proposal will be accepted for 60 days after publication in the Federal Register. The comment period is scheduled to close on April 13, 2026.

“This proposed rule is the first step in NCUA’s implementation of the GENIUS Act,” NCUA Chairman Kyle Hauptman told the press. “We’re on track to meet the Congress’s 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 draft rule is currently available in the Federal Register for review, and the union has also posted guidance materials on its Financial Technology and Digital Assets Resource Page.

Creditors to set rules for stablecoin issuance

Under the proposed framework, credit unions would not be allowed to issue stablecoins directly. Any participation would need to occur through a licensed subsidiary designated as a PPSI.

The structure separates stablecoin operations from core credit union activities in tandem with regulatory legislation. Applicants seeking PPSI status must meet the NCUA’s extensive governance and operational standards.

Moreover, the rule requires background checks for executives, alongside capital requirements, reserve mandates, and anti-money laundering controls. Cybersecurity safeguards and operational resilience planning would also be mandatory. Stablecoins issued by approved subsidiaries would have to maintain a full one-to-one reserve backing and provide clear redemption rights for holders.

The regulatory push comes at a time when the use of fiat-currency-backed digital assets is on the rise. According to the DeFi analytics platform DeFiLlama, the stablecoin market grew by a whopping 49% in 2025, driven by the passage and signing of the GENIUS Act in July.

Stablecoins gained popularity among businesses and consumers after the US government changed its stance on cryptocurrencies. However, users prefer the digital assets to fiat because they have market-rate yields with no minimum balances or lockup periods.

The NCUA’s proposed rule emerges as policymakers continue to balance innovation with American banks’ concerns about stablecoin-related financial stability. According to its press release, the credit union is moving to meet a July 18 congressional deadline for implementation.

White House talks on stablecoins stall, bankers’ stance unchanged

The issue of stablecoin yields was a focus of discussions earlier this week at the White House, where senior executives from both sectors met to find common ground. As reported by Cryptopolitan, the meeting was deemed “productive,” but the parties did not reach a final agreement on certain policies in the crypto market structure legislation, Clarity Act.

The gathering is the second in a series of closed-door talks aimed at resolving disputes over whether stablecoin issuers should be allowed to offer rewards or interest. Representatives from major crypto firms, including Ripple and Coinbase, were in attendance, alongside trade organizations such as the Crypto Council for Innovation and the Blockchain Association.

The banking industry attendees included Goldman Sachs, Citi, JPMorgan Chase, and the American Bankers Association.

According to a leaked document, bankers presented a set of “prohibition principles” calling for strict limits on any financial or non-financial benefits for holding payment stablecoins. The proposal called for a ban on incentives linked to ownership or use of stablecoins, accompanied by enforcement measures and restrictions on insured deposits.

Crypto industry representatives strongly opposed many of those principles during the meeting, according to a source familiar with the discussions.

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