NCUA Proposes Stablecoin Standards for Credit Unions

The National Credit Union Administration ("NCUA") proposed operational and risk-management standards for the issuance of payment stablecoins by credit union subsidiaries under the GENIUS Act.

Under the proposal, an NCUA-Licensed Permitted Payment Stablecoin Issuer must be a subsidiary of a federally insured credit union ("FICU,") including a credit union service organization ("CUSO"), a service organization under 12 U.S.C. 1757(7)(I) ("Powers,") or a state-chartered insured depository institution subsidiary authorized under state law. A joint application by the applying issuer and its FICU parent or parents would be required, and the NCUA would conduct biographical and fingerprint reviews of directors, officers, and shareholders holding at least 10 percent ownership.

NCUA proposed requiring payment stablecoin reserves to be backed one-to-one in U.S. currency or other specified liquid assets, with reserve diversification and concentration limits. Custody would have to be at "Eligible Financial Institutions" as defined under the GENIUS Act, with required custody agreements. Issuers would publish their redemption policies and disclose reserve details monthly. The proposal would prohibit rehypothecation of reserves and would disqualify non-payment-stablecoin crypto-assets as reserve assets.

The NCUA said payment stablecoins issued under the framework would not be covered by NCUA or FDIC insurance and would not carry the full faith and credit of the U.S. government, and that issuers would be prohibited from misrepresenting any such backing. The NCUA said that the GENIUS Act preempts state licensure of NCUA-licensed subsidiary issuers, but state consumer protection laws would not be preempted.

The proposal supplements the NCUA's February 12, 2026 licensing proposal. (see prior coverage.) Comments are due by July 17, 2026.