The National Credit Union Administration (NCUA) has introduced its first set of rules under the GENIUS Act, which aims to establish a framework for federally insured credit unions to become licensed payment stablecoin issuers. This proposal outlines that any subsidiary of an insured credit union wanting to issue stablecoins must secure a permitted payment stablecoin issuer (PPSI) license. Furthermore, credit unions will be prohibited from investing in or lending to any payment stablecoin issuer unless that issuer holds the necessary license. The proposed regulations include notable features for the crypto sector. For one, the NCUA cannot reject an application solely because the stablecoin is issued on a public or decentralized network. This is significant for projects leveraging public blockchains. Additionally, the NCUA must act on a “substantially complete” application within 120 days; otherwise, the application is automatically approved. The proposal also emphasizes that credit unions cannot directly issue stablecoins but must route these activities through subsidiaries that comply with federal standards. This document serves as a notice of proposed rulemaking, allowing stakeholders a 60-day window to comment before the NCUA finalizes the licensing regime. The agency is still finalizing the broader regulations related to reserves, capital, and risk management for PPSIs, which will come in a future proposal. This initiative is part of a larger movement to regulate stablecoins and align them with federal oversight.