NCUA unveils licensing blueprint for credit-union stablecoin subsidiaries

The National Credit Union Administration has set out a first formal proposal to govern how credit-union-controlled entities would become federally supervised payment stablecoin issuers under the GENIUS Act. The draft rule concentrates on the licensing pathway and investment restrictions: subsidiaries that plan to issue payment stablecoins must secure a permit before launching, and federally insured credit unions would be barred from funding or lending to such issuers unless they hold that permit. The agency limited this initial package to procedural and structural elements while signaling that a later rulemaking will detail capital, reserve, liquidity, anti-money-laundering, and technology risk standards that PPSIs must meet. Two provisions will matter to marketplace architects and crypto-native firms: the NCUA will not reject an otherwise complete application solely because the token operates on a public or decentralized ledger, and the regulator will face a 120-day statutory window to grant or deny a substantially complete filing — if it fails to act the filing is automatically approved. Practical implementation for credit unions will usually require routing stablecoin activity through supervised subsidiaries or qualifying service organizations that fall under NCUA oversight, rather than direct issuance by the insured institutions themselves. Stakeholders have a 60-day period after the proposal hits the Federal Register to submit comments and objections before the agency can finalize the licensing regime or alter the draft. By separating foundational licensing questions from detailed prudential standards, the NCUA aims to create a predictable gatekeeping process without immediately imposing the technical guardrails that will govern operations. That sequencing reduces near-term regulatory ambiguity but creates a clear compliance cliff: entities can obtain initial authorization but will remain contingent on subsequent, stricter rules. For market participants, the proposal signals a federal path for credit-union-linked stablecoin issuance that preserves the ability to use public blockchains while bringing issuance under federal supervision. The combination of a defined approval timeline and explicit investment prohibitions is likely to accelerate planning inside credit unions and their service organizations, even as the eventual cost and operational burden will depend on the forthcoming prudential standards. Overall, the document reframes stablecoin entry for a large slice of the U.S. cooperative banking sector from an open question into a phased regulatory process with explicit deadlines and future compliance expectations.