Why Credit Unions Should Pay Attention to Stablecoins

CRCFO
Jul 3
4 min read

Updated: 12 minutes ago

by Tim Smith, CPA Credit Union Practice Leader

Stablecoins: A Strategic Imperative for Credit Union Leaders

The financial landscape is evolving at an unprecedented pace, and at the heart of this transformation lies the emergence of stablecoins. For credit union leadership, understanding this nascent technology isn't just about staying informed; it's about safeguarding your institution's future profitability and relevance. Stablecoins, digital tokens typically pegged to fiat currencies like the U.S. dollar, are designed to offer the speed and cost efficiency of cryptocurrency with the stability of traditional money. Major consumer and commercial organizations are actively exploring their issuance and integration, signaling a fundamental shift in payment infrastructure.

This shift presents both opportunities and significant challenges for credit unions. While stablecoins could revolutionize payment rails, offering members faster, cheaper transactions and potentially opening new avenues for service, their widespread adoption carries a substantial risk. There's a real potential for a significant outflow of funds from your most profitable deposit accounts, directly eroding your stable and low-cost funding base.

Navigating this complex terrain requires proactive engagement. Critical legislation currently moving through Congress, such as the GENIUS Act, will define the regulatory framework for stablecoins, directly impacting how credit unions can or cannot participate. Leaders must be acutely aware of these legislative developments and their potential ramifications on everything from member service offerings and necessary talent acquisition to their financial regulatory filings. Ignoring stablecoins is no longer an option; this emerging asset class demands your immediate attention and strategic consideration.

KEY BENEFITS FOR CONSUMERS AND BUSINESSES

Faster, lower‑cost payments: Stablecoins enable near-instant domestic and cross-border transfers, often at a lower cost than traditional systems.
Enhanced financial inclusion: They expand access to financial services via digital transactions, benefiting underbanked communities.
Potential new revenue streams: Credit unions could offer stablecoin custody, conversions, remittances, and earn interoperability fees, potentially diversifying income with transaction-based and asset-tokenization services. But the credit union’s loss of merchant and interchange fees could be substantial.
Competitive advantage: If credit unions decide to issue stablecoins as a key tactic to defend deposits, it could position the organization as forward-thinking and innovation-friendly, aligning with evolving member expectations .

KEY RISKS

Reserve & liquidity burdens: Legislation (e.g., GENIUS Act) may require one-to-one reserves in cash or Treasuries, potentially reducing loanable funds.
Regulatory complexity: Must monitor evolving federal frameworks (GENIUS & STABLE Acts) . Legislation is still evolving, states may add additional layers, and supervision may shift between bank regulators, the SEC, or the CFTC.
Technology & infrastructure: Need secure custody systems, integration tools, and digital compliance protocols.
Member safeguards: AML/KYC (“Know Your Customer” is a component of AML, “Anti-Money Laundering”), cybersecurity controls, and operational policies must be robust.

ESSENTIAL SKILLS TO DEVELOP OR SOURCE

Digital asset proficiency: Understanding stablecoin mechanics, blockchain infrastructure, and custody systems.
Regulatory and compliance expertise: Deep familiarity with AML/KYC. It is also critical to stay abreast of current legislation (GENIUS/STABLE/FIT21 acts) and the impact on credit unions.
Risk & treasury management: Oversight of reserve requirements, liquidity management, and fund optimization.
Tech-savvy integration capabilities: Ability to implement secure digital payment and ledger systems.
Strategic product leadership: Capacity to envision and launch member-centric digital offerings.

REPUTABLE SOURCES TO MONITOR

This is a rapidly evolving environment, and there are many unknown and unanswered issues. Our senior credit union experts are following key developments and engaging in important dialogue to address the impact on credit unions. Here are a few sources we are monitoring.

Legislation

GENIUS Act (S.1582): Senate-passed; mandates 1:1 stablecoin reserves, issuer registration, and AML oversight; advances to the House. Library of Congress summary
STABLE Act: House companion bill with similar goals; credit union advocacy emphasizes clarity in permitted activities and reserve definitions. As the GENIUS legislation makes it way to the House, these two pieces of legislation may be merged.
FIT21 Act: The Financial Innovation and Technology for the 21st Century Act (FIT21) was a bill passed in the House of Representatives in May 2024 to address the treatment of digital assets under U.S. law and define regulatory responsibilities in US agencies. It has stalled in the Senate and has not been passed into law.

Financial and Legal

AICPA: The American Institute of CPAs (AICPA) has released the 2025 Criteria for Stablecoin Reporting: Specific to Asset-Backed Currency-Pegged Tokens. These criteria provide a framework to stablecoin issuers for presenting and disclosing information related to the tokens they issue, and to report on the availability of cash or other assets that back them. The AICPA will continue to develop the guidelines for accounting and reporting of stablecoin-backed digital currencies.
Financial Times: While this is a paid subscription, it provides in-depth information about how stablecoins are entering mainstream financial institutions.
Goodwin Law: There are many legal institutions, and we recommend one that you may already be familiar with. Goodwin Law has provided an excellent summary of the GENIUS legislation.
Forbes: Provides a summary of their stablecoin business reporting.
WSJ: Another paid subscription, but this article is specific to banks, Fiserv, and has suggested articles to follow.

Credit Unions

America’s Credit Unions: Stay abreast to understand the impact on credit unions. cusomag.com.
Check your local credit union league for ongoing updates and recommendations.

By staying informed and proactively building or sourcing capabilities, your credit union can harness the benefits of stablecoins while managing associated risks.

At Charles River CFO, we specialize in fractional and interim finance leadership, helping credit unions grow their organizations. Our practice leaders are former Big 4 CPAs with deep sector experience—and they’re ready to help your organization plan for the future of stablecoin.

Fractional CFO Services: Strategic financial leadership to guide growth.
Controller Services: Oversight of accounting operations and financial reporting.
FP&A Support: Detailed financial analysis to make informed business decisions.

Our approach is collaborative and customized, ensuring that our clients receive the precise support they need to navigate growth and change.

READY TO SCALE SMARTLY?

Discover how Charles River CFO can support your institution. Visit www.crcfo.com to learn more about our services and to get in touch with us to schedule a consultation.