By Jason Stverak
On May 14, the Senate Banking Committee will hold an Executive Session to consider H.R. 3633, the Digital Asset Market Clarity Act of 2025. That is a significant moment not only for the crypto industry, but for ordinary Americans who want basic answers to basic questions:
- Who is regulating this market?
- What protections apply when something goes wrong?
- Will responsible, community-based financial institutions be allowed to compete on fair terms?
From the perspective of the Defense Credit Union Council, the answer should not be to block progress. Congress should move digital-asset activity out of legal gray zones and further inside the regulated financial perimeter. That is why DCUC supports the bill’s direction.
In our January comments to Congressional leaders, we expressed that while H.R. 3633 is an important step toward regulatory clarity, it still needs targeted improvements to ensure credit unions are treated fairly and consumers remain protected. This position remains just as relevant and important today.
The bill already offers meaningful progress. Section 401 appears to confirm that federally insured credit unions may use digital assets and distributed-ledger systems for activities they are otherwise permitted to conduct, such as payments, custody, and other lawful services. That matters. Credit unions should not be locked out of the next phase of financial infrastructure simply because legislative or regulatory frameworks were drafted primarily with banks in mind and leaving other financial institutions at a disadvantage or afterthought.
If Congress seeks to encourage innovation within the regulated financial system, rather than outside of it, credit unions must have a clear and permanent seat at the table.
Only the Start
But section 401 is only the start. The bill should explicitly name the National Credit Union Administration (NCUA) wherever prudential regulators are referenced in provisions affecting the credit-union system. It should clearly extend comparable authority to credit union service organizations, or CUSOs, wherever banks, bank affiliates, or comparable intermediaries are granted operational flexibility or expressed authority.
This is far more than a technical drafting issue. A significant share of credit-union innovation is delivered through affiliated service organizations or channels, aligned partnerships, and shared-service platforms. If banks receive explicit, statutory authority while credit unions are forced to argue or rely on implications or interpretations, true parity will exist in theory, not practice.
Should be Applied to Compliance
The same goes for compliance. Sections 201 and 202 appear to expand anti-money-laundering and Bank Secrecy Act expectations for digital-asset intermediaries and call for examination standards tailored to this market. Strong AML rules are necessary, but Congress should be careful not to write a compliance regime built for the largest exchanges and then quietly impose it on every small or midsize institution that wants to offer a limited, well-supervised service. Credit unions need tiered compliance and safe harbors that reflect size, complexity, and actual risk. That is not a request for weaker oversight. It is a request for effective, proportionate oversight that preserves both safety and innovation.
Even NCUA’s recent stablecoin rulemaking posture reflects an interest in ensuring credit unions are not left at a competitive disadvantage as digital-asset rules evolve.
Congress Should Finish the Job
Section 404 points to another place where Congress is on the right track but should finish the job. The bill’s bar on passive, deposit-like interest or yield for simply holding payment stablecoins is important. It helps guard against stablecoins becoming functional substitutes for insured deposits without equivalent obligations or safeguards. But lawmakers should tighten the language so that wallets, affiliates, exchanges, rebate programs, loyalty arrangements, or similar structures cannot recreate yield in substance while pretending to be something else in form.
If the policy goal is to prevent backdoor deposit disintermediation, Congress should say so clearly and shut the loopholes before they open.
There is also a practical custody issue that deserves more attention than it usually gets in public debate. If a credit union holds digital assets in custody for a member, those assets should not be confused with insured shares, and they should not be treated in a way that artificially distorts the institution’s capital, liquidity, or balance-sheet treatment. Congress should make that explicit.
Good consumer disclosure and good prudential accounting go together. The public should know what is insured and what is not, while regulated institutions should be able to offer custody without having customer property mischaracterized as their own.
The Stakes are Real
All of this is especially important because the consumer-protection stakes are real. The FBI has reported that cryptocurrency-related investment fraud produced more than $6.5 billion in reported losses in 2024 alone. That is not an argument for pretending digital assets will disappear. It is an argument for making sure Americans encounter this market through stronger rules, better disclosures, sounder supervision, and trusted institutions that already know how to serve members and communities.
The answer to a risky market is not a vacuum. It is responsible governance.
Congress now has a chance to show that digital-asset legislation can be pro-innovation without being careless, and pro-consumer without locking out community-based institutions. The right path is neither wholesale resistance nor blank-check endorsement. It is disciplined lawmaking: support H.R. 3633’s direction, then improve it with explicit credit-union parity, clear NCUA authority, CUSO inclusion, proportionate compliance, tighter anti-yield safeguards, sound custody treatment, and smooth coordination with the stablecoin framework already taking shape.
If senators do that on May 14, they will not just be advancing a bill. They will be building a more credible financial system.
Jason Stverak is chief advocacy officer with the Defense Credit Union Council.
