The National Credit Union Administration (NCUA) of the United States has formally proposed a regulatory framework for its subsidiaries to obtain a stablecoin issuer license. Under the protection of the GENIUS Act, this initiative seeks to have federally supervised institutions operate as payment stablecoin issuers, establishing clear standards to guarantee the safety and solvency of the current financial system for all participants.
With this proposal, the NCUA, which oversees more than 4,000 credit unions with assets exceeding $2 trillion, defines the federal oversight process. In this way, credit unions are prohibited from investing in issuers that do not have the proper accreditation, ensuring that control over digital assets remains an absolute priority to protect the 144 million members who make up these financial entities across the nation.
Oversight structure and requirements for federal subsidiaries
The draft establishes that any entity wishing to operate as a PPSI must mandatorily obtain the stablecoin issuer license before starting its commercial activities. However, credit unions will not be able to issue these assets directly, but must channel their operations through independent subsidiaries instead, ensuring that uniform federal standards are met regarding capital and liquidity required by modern technology for financial services.
Likewise, the regulator has made it clear that it will not be able to reject applications based solely on the use of public or decentralized networks for issuance. Therefore, technological neutrality is a fundamental pillar of this proposal, allowing innovation in open networks to progress without unjustified bureaucratic obstacles, as long as the strict requirements of risk management and anti-illicit finance measures provided by the agency are met.
On the other hand, a default approval mechanism has been implemented to speed up administrative procedures before the federal authority. Once an application is considered complete, the NCUA will have 120 days to issue a verdict; otherwise, the license will be considered granted automatically. In this way, the aim is to avoid unnecessary delays that could slow down the competitiveness of credit unions against traditional commercial banks.
What impact will the GENIUS Act have on the stablecoin market?
Therefore, this regulation represents the first step toward a deep integration of crypto assets into the insured deposit system. Currently, the focus is on the licensing architecture, but future rules will define the limits for reserves and information technology. Therefore, the stability of the payments market will depend on the robustness of these legal frameworks that separate traditional deposits from digital assets in the financial system.
Regarding the implications for the sector, the measure could significantly diversify the offer of regulated stablecoins in the United States territory. If credit unions manage to enter successfully, competition in the payments sector will increase, ensuring that users access financial services that are more efficient, transparent, and backed by the supervision of a federal regulator with extensive experience in crisis management.
In addition, the openness toward public blockchains suggests a change in mindset among Washington regulators regarding decentralization. By allowing PPSIs to operate on open networks, a global infrastructure is fostered where cross-border payments become cheaper, ensuring that credit unions expand their influence beyond conventional banking services, adapting to the demands of the contemporary digital economy and the needs of their members.
Looking toward the future, the 60-day comment period will be vital for adjusting the technical details of the final proposal. While the industry awaits the final version, legal certainty for issuers seems to be closer than ever in the North American market. The convergence between traditional finance and crypto will define the resilience of the financial system, marking a historical milestone in the regulation of digital assets supervised by the government.
