William Wille, managing editor, The Credit Union Connection
The National Credit Union Administration (NCUA) has dropped a roadmap for the future of digital payments, and if you haven’t been paying close attention to the GENIUS Act (signed into law July 18, 2025, by President Trump), you may already be behind the pace.
In racing, the pace car sets the tempo before the green flag drops. On February 11, 2026, the NCUA officially pulled onto the track by releasing a Notice of Proposed Rule Making for stablecoin issuance, moving the conversation from “what-if” to the Federal Register.
Comments are due to the NCUA by April 13.
While stablecoin might still sound like a buzzword or conjure up references to bitcoin, NCUA’s move shifts the conversation directly into the credit union movement’s lane.
As Chairman Kyle Hauptman has expressly assured, the goal is to ensure credit unions aren’t stuck in the pits while banks and fintechs take the lead. His commentary addresses credit unions’ long-standing fear of being tied up in regulatory red tape before reaching the finish line.
“This proposed rule is the first step in NCUA’s implementation of the GENIUS Act,” said Chairman Hauptman. “We’re on track to meet the Congress’ July 18 deadline. Credit unions should be aware that they won’t be at a disadvantage versus other entities, whether in timing or standards.”
However, if you were hoping to just flip a switch and start issuing stablecoin, it might not be quite that easy.
Looking under the hood
While the GENIUS Act establishes a regulatory framework for payment stablecoins and provides pathways for regulation at both the federal and state levels, it comes with some major caveats. The NCUA’s proposed rule focuses on the ‘who’ and ‘how’ of the application process and makes it clear that stablecoin issuance is not a credit union single issue product. To issue a payment stablecoin, credit unions must use a Permitted Payment Stablecoin Issuer (PPSI). For the movement, that means a subsidiary or CUSO.
Also, the NCUA seems to really want to see joint applications rather than potentially thousands of individual credit unions all trying to reinvent the same wheel. This means multiple credit unions can band together to power a single PPSI. It’s the ultimate collaborative play: pooling resources to build the digital infrastructure that no one credit union could afford to build alone.
This was just the NCUA’s first proposal. However, the GENIUS Act already set some non-negotiable tech specs for any PPSI:
- One-to-One Reserves: Every stablecoin must be backed 1:1 by U.S. currency or highly liquid assets.
- Transparency is Mandatory: PPSIs have to publish monthly details of their reserves. In the credit union world, member trust is the currency, and the NCUA is making sure that currency is verifiable.
- The Insurance Reality: This is a big one! Stablecoins are not backed by the NCUSIF. Part of this rule involves strict penalties to prevent anyone from misrepresenting these coins as federally insured “shares.”
Kicking the stablecoin tires
This is only the first lap for the NCUA. The proposal sets the licensing framework, but the heavy lifts, capital requirements, reserve management and the actual cybersecurity guardrails will be in future rulemaking.
The NCUA is currently building the track. The most critical turn in this race is currently April 13, the deadline for the movement to submit comments on the proposed rule or risk being lapped in the emerging digital economy.
The Board is specifically seeking feedback on its nuanced approach to joint applications. It is also currently navigating a tight 120-day turn to review and decide on complete applications once they start rolling in.
The NCUA is looking for:
- Joint Applications: If a credit union owns 10% or more of an issuer (or acts as the primary lead in a widely held group), they are a Parent Company. This means the credit union and the subsidiary are joined at the hip in the regulator’s eyes.
- The No-Felony Zone: The agency will be doing deep dives into the integrity of officers and directors. If you’re at the helm of a PPSI, your record needs to be cleaner than a brand-new showroom floor.
- Biometric Scrutiny: We’re talking fingerprints and full background checks for anyone exercising “significant influence.”
Whether you’re $10B or $100M, the time for “wait-and-see” is over. If the cooperative model is going to compete in a digital-first economy, credit unions need to be the ones helping the NCUA design the track.
Questions for credit unions to consider: Is the 10% threshold for Parent Companies appropriate? Is the joint application process streamlined enough, or is it more regulatory red tape? If the credit union movement doesn’t react now, it’s not informing regulators on how the track will function in reality — it’s essentially waving the white flag.
Ready to weigh in? Submit your comments by April 13 in the Federal eRulemaking Portal.