The National Credit Union Administration has proposed its first rules under the GENIUS Act, outlining how subsidiaries of federally insured credit unions could apply to become federally supervised payment stablecoin issuers.
Under the draft framework, any payment stablecoin issuer operating as a subsidiary of an insured credit union would be required to obtain an NCUA permitted payment stablecoin issuer licence before issuing tokens.
“A forthcoming proposal will propose regulations to implement the standards and restrictions imposed by the GENIUS Act on PPSIs,”
The agency said in the preamble to the notice of proposed rulemaking.
Federally insured credit unions would also be barred from investing in or lending to payment stablecoin issuers unless those entities hold an approved PPSI licence.
The proposal specifies that the NCUA cannot deny a substantially complete application solely because a stablecoin is issued on an open, public or decentralised blockchain network.
Once an application is deemed substantially complete, the regulator would have 120 days to approve or deny it, with applications automatically deemed approved if no action is taken within that period.
The draft rule is open for public comment for 60 days following publication in the Federal Register, after which the NCUA may finalise or revise the licensing regime governing stablecoin subsidiaries of credit unions.