WASHINGTON—The Defense Credit Union Council is urging the National Credit Union Administration to adopt a flexible, principles-based regulatory framework for payment stablecoins, arguing that credit unions should have the same opportunity as banks to participate in the emerging digital payments market.
In a comment letter submitted to the NCUA, DCUC said it generally supports the agency’s proposed rule implementing portions of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, known as the GENIUS Act. According to DCUC, the proposal would establish a regulatory framework for NCUA-licensed Permitted Payment Stablecoin Issuers (PPSIs) and federally insured credit unions that participate in the payment stablecoin market.
The proposal expands on the NCUA’s earlier licensing framework for stablecoin issuers.
“Responsible innovation and strong supervision are not competing priorities,” DCUC President and CEO Anthony Hernandez said in a statement. “A well-calibrated framework can protect the financial system while ensuring credit unions have the same opportunity as other federally regulated financial institutions to participate in the evolving payments market.”
Hernandez added that such participation is particularly important for credit unions serving servicemembers, veterans and military families who rely on secure and efficient financial services.
Recommendations Made
In its letter, DCUC called on the NCUA to:
- Maintain consistency with federal banking regulators whenever possible.
- Use principles-based regulatory requirements.
- Avoid unnecessary operational, timing and reporting mandates.
- Preserve regulatory flexibility as stablecoin business models evolve.
- Clarify consumer protection requirements and examination standards.
- Review and refine the regulatory framework after implementation.
The organization also made recommendations related to reserve assets, redemption requirements, capital standards, reporting and supervision. Among them, DCUC endorsed the NCUA’s principles-based approach to reserve asset diversification, recommended allowing at least three business days for redemptions and urged the agency to require monthly rather than weekly supervisory reporting.
“The NCUA’s proposal is a constructive starting point for implementing this new statutory framework,” DCUC Chief Advocacy Officer Jason Stverak said in a statement. He said the final rule would be most effective if it remains aligned with other federal banking agencies and focuses regulatory requirements on demonstrated supervisory risks.
Who Should Bear Costs
DCUC also argued that any additional NCUA costs associated with overseeing payment stablecoin activities should be borne only by institutions participating in those activities, rather than through the general federal credit union operating fee or the National Credit Union Share Insurance Fund overhead transfer.
Because the GENIUS Act creates an entirely new regulatory framework, DCUC said the NCUA should continue working closely with industry stakeholders and review the final rule within its first year of implementation to determine whether adjustments are needed.
