NCUA publishes proposed GENIUS Act stablecion rules for credit unions

NCUA has issued its first GENIUS Act implementing proposal, setting out how credit union–affiliated entities can become licensed payment stablecoin issuers and how FICUs may invest in them.

High‑level status

• On February 11–12, 2026, NCUA released a Notice of Proposed Rulemaking (NPRM) to implement its GENIUS Act mandate for “permitted payment stablecoin issuers” (PPSIs) tied to federally insured credit unions (FICUs).

• The proposal is published in the Federal Register and the comment period runs until April 13, 2026.

• This is NCUA’s first GENIUS Act rulemaking; additional proposals are expected to address other aspects of the statute.

Scope of the proposal

• GENIUS authorizes NCUA to license, regulate, and supervise PPSIs that are subsidiaries of FICUs; NCUA’s proposal focuses on those subsidiaries and their parent credit unions.

• The rule also addresses FICU investments in stablecoin issuers, limiting them to NCUA‑licensed PPSIs.

• NCUA is on track to meet the statutory July 18, 2026 deadline to finalize implementing regulations.

Issuer structure and CUSO requirement

• While the GENIUS Act text is somewhat ambiguous about whether credit unions can issue stablecoins directly, NCUA interprets it to require issuance via subsidiaries, not directly by the credit union itself.

• For federal credit unions, any stablecoin issuance must occur through a credit union service organization (CUSO) that primarily serves credit union members.

• The proposal also seeks comment on PPSIs that may be subsidiaries of multiple types of insured depository institutions and how overlapping oversight with FDIC/OCC/Fed should work.

Application, timing, and standards

• PPSIs must submit a joint application with their parent FICU (or defined parent/principal shareholder) to obtain a GENIUS license from NCUA.

• NCUA proposes a 120‑day decision deadline on complete applications, with potential for conditional approvals under consideration.

• Evaluation criteria include the issuer’s and parent’s financial condition, management integrity, risk management, and compliance with BSA/AML and sanctions obligations.

Ongoing compliance and investment limits

• Licensed issuers must certify within 180 days of approval, and annually thereafter, that they have implemented AML and sanctions compliance programs suitable to their activities.

• FICUs are limited to investing in NCUA‑licensed PPSIs and must treat such relationships within existing investment and third‑party risk frameworks.

• The proposal clarifies reporting and disclosure expectations and asks for feedback on fee structures, operational standards, and business plan requirements for PPSIs.

Practical next steps for credit unions

• Credit unions interested in GENIUS‑compliant stablecoin activity should evaluate whether to use or form a CUSO that could serve as a PPSI and begin mapping ownership and governance to the proposed parent‑company tests.

• Stakeholders are encouraged to submit comments to NCUA by April 13, 2026, particularly on ownership thresholds, multi‑regulator coordination, and the CUSO‑only issuance model.