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| NCUA issues First Proposal to Implement GENIUS Act |
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Credit unions and related organizations interested in becoming a permitted payment stablecoin issuer (PPSI) now have clarity on action steps. The NCUA issued a proposed rule Wednesday outlining the framework for applicants seeking NCUA approval. This is the first stablecoins rulemaking as required by the GENIUS Act, with additional proposals to come.
“America’s Credit Unions actively championed the inclusion of credit unions in the GENIUS Act, and we appreciate that today’s stablecoin proposal reflects that work. Credit unions should have the same opportunity as any other federally regulated institution to participate in emerging payment systems,” said America’s Credit Unions President/CEO Scott Simpson. “This proposal marks the first phase of implementing the GENIUS Act, and we are encouraged that the NCUA has addressed key questions regarding the role of credit union subsidiaries that may serve as stablecoin issuers. As we review the details, we look forward to providing feedback to ensure the application process is clear, timely, and workable for credit unions of all sizes.”
This proposal focuses on application requirements for PPSIs and their parent companies, which must demonstrate financial health, responsible management, and viable business plans in order to be licensed. Federal credit unions using a subsidiary to issue stablecoins must do so through a credit union service organization (CUSO) and primarily serve credit union members.
NCUA would render a decision on an application within 120 days. Following approval, a licensed issuer would need to certify within 180 days and on an annual basis thereafter that it has implemented anti-money laundering and economic sanctions compliance programs to prevent money laundering.
Federal agencies are required to complete rulemakings implementing the GENIUS Act by July 18. In the proposal announcement, NCUA Chairman Kyle Hauptman said NCUA is on track to meet that deadline.
NCUA also posted information on its Financial Technology and Digital Assets Resource Page.
America’s Credit Unions will submit comments to address credit union concerns in the process. Credit unions are also encouraged to submit comments by April 13.
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