DCUC Supports NCUA’s Proposed Stablecoin Framework, Recommends Greater Clarity And Flexibility
By CU Today Staff —
WASHINGTON — The Defense Credit Union Council Friday filed a comment letter with NCUA in response to the agency’s proposed rule implementing portions of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, commonly known as the GENIUS Act.
The proposed rule supplements the NCUA’s previous licensing proposal and would establish a regulatory framework for NCUA-licensed Permitted Payment Stablecoin Issuers, or PPSIs, and federally insured credit unions participating in the emerging payment stablecoin market.
DCUC expressed general support for the proposal and for the establishment of a supervisory framework that advances safety and soundness while allowing responsible innovation. DCUC also offered recommendations intended to improve the final rule’s clarity, flexibility and operational efficiency.
“Responsible innovation and strong supervision are not competing priorities,” said Anthony Hernandez, DCUC president and CEO. “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. That opportunity is especially important for credit unions serving servicemembers, veterans and military families who depend on secure, efficient and resilient financial services.”
In its letter, DCUC urged the NCUA to:
DCUC also provided detailed recommendations concerning reserve assets, redemptions, supervision, reporting, capital requirements and regulatory assessments. Among other recommendations, DCUC supported the NCUA’s proposed principles-based approach to reserve-asset diversification, encouraged a redemption period of at least three business days and recommended monthly rather than weekly supervisory reporting.
“The NCUA’s proposal is a constructive starting point for implementing this new statutory framework,” said Jason Stverak, DCUC chief advocacy officer. “The final regulation will be most effective if it remains principles-based, aligned with the other federal banking agencies and proportionate to demonstrable supervisory risks. Reasonable redemption timelines, appropriately calibrated reporting requirements and clear examination expectations would improve operational efficiency without compromising safety and soundness.”
DCUC further recommended that any assessments imposed to cover the NCUA’s additional stablecoin-related oversight costs be limited to institutions participating in those activities. Those costs should not be paid through the general federal credit union operating fee or the National Credit Union Share Insurance Fund overhead transfer.
Because the GENIUS Act establishes an entirely new regulatory regime, DCUC emphasized that continued engagement between the NCUA and industry stakeholders will be essential during implementation. DCUC encouraged the agency to review its final requirements within the first year after implementation and periodically thereafter to ensure the framework continues to support responsible innovation while maintaining safety and soundness.
Originally reported by CU Today.