It’s GENIUS: Stablecoins Give Credit Unions a Path Back to the Future

Even the crypto-cautious can appreciate what stablecoin offer: trust, control, and the chance for credit unions to move ahead their terms.

by: Marc Rapport
Contributing Editor

Stablecoin is the gold standard reimagined for the digital age – backed, manageable, and steady. It’s not hype or speculation; it’s money that behaves like money, just faster and more flexible.

Now may not be the time to jump in – but it’s certainly time pay attention, even for the most crypto-phobic of credit union executives.

That’s because stablecoin may well represent a practical path forward for credit unions looking to modernize without compromising that most-critical currency: trust.

The GENIUS Act: A Clear Lane for Credit Unions
Stablecoin are digital assets that maintain a stable value by tying their price to a reference asset, like the U.S. dollar and U.S. Treasuries their issuers buy to back them.

They can be used to buy goods, settle transactions, or transfer funds. Like physical cash, but digital.

New impetus for adoption comes from the new GENIUS Act, which says a payment stablecoin must be redeemable for a set amount and backed by a 1:1 reserve. 

A primer on the topic from America’s Credit Unions says this: “The GENIUS Act helps level the playing field by giving federally insured credit unions clear custodial authority under the oversight of the NCUA (rather than a bank regulator), and permits subsidiaries of federally insured credit unions, such as CUSOs, to become stablecoin issuers.”

The Act also states that stablecoins are not securities or commodities, and issuers are not investment companies, the ACU document notes. That legal clarity gives credit unions a safe path to explore stablecoin without the regulatory confusion – and investment risk –that’s dogged crypto such as Bitcoin and Ethereum.

In other words, they’re more like gold-backed bank notes from the days of old than digital casino chips of today. St. Cloud Makes the First Move with $CLDUSD

For St. Cloud Financial Credit Union, the GENIUS Act wasn’t just permission, it was a green light. In partnership with Metallicus and DaLand CUSO, the $407.3 million Minnesota cooperative is now issuing Cloud Dollar ($CLDUSD), billed as first credit union-issued stablecoin in the country.

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Chase Larson

“This milestone is the natural progression of the CU-Digital Asset Vault strategy SCFCU has been advancing with DaLand over the past four years,” Chase Larson, St. Cloud Financial’s EVP/CLO, says in the September announcement. “The core-integrated platform ensures members can securely vault approved digital assets, now enabling $CLDUSD issuance and automation driven directly from the core.

“We’re extending this safekeeping-first platform with stablecoin utility enabling transparent, low-cost on-chain money movement – from merchant payouts to member-to-member and institution-to-institution – at a fraction of card-network fees.” 

St. Cloud’s launch isn’t just about technology – it’s about timing, control, and keeping deposits where they ideally belong: at the credit union.

Cornerstone, Zelle, and Credit Unions Catching Up
Credit unions across the country are stepping up to explore stablecoin at their own pace. Through its partnership with Metallicus, Cornerstone League is offering its more than 600 member credit unions access to a Stablecoin Pilot, letting them test issuance and operations in a simulated environment.

Zelle’s parent company, Early Warning Services, also just announced it will use stablecoins for cross-border payments – a major expansion backed by big banks and available to the more than 2,300 credit unions in the sprawling Zelle network.
But Jed Meyer, president and CEO of St. Cloud Financial since 2014, says stablecoins don’t require choosing winners or taking sides. 

“How will I have to modernize my technology platform to get to the spot where I can actually be agile? I can move at my pace, I can move at my members’ pace, and I can move at the regulatory pace, and I don't actually have to pick or choose a winner,” Meyer says in a recent appearance on CUbroadcast.

He draws a parallel to a previous transition. “When I looked at it,” Meyers says, “I didn't have to choose between MasterCard or Visa. I just had to build the infrastructure. And it’s the same thing now.”

Meyer adds: “I'm not a crypto enthusiast, a nerd, or any of that stuff. I don't own crypto. I wish I did. I come at it from a CEO's perspective to say, hey, my members are going to move into this space. We need to be there with them.”

His data backs it up. In the past three years, his credit union saw digital asset withdrawals grow from $1 million to $9 million. He also says that a survey shows 22% of his 27,000 or so members either are in or want to be in this space. That interest is hard to ignore.

Nationally, though, crypto payment use remains limited. According to a September report from the Federal Reserve Bank of Kansas City, fewer than 2% of U.S. consumers reported using cryptocurrency for payments in 2023 and 2024, down from nearly 3% in 2021 and 2022.

But for credit unions already seeing funds leave to outside exchanges, even a small shift in behavior can have a big financial impact.

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Tony DeSanctis

Where Stablecoins Fit. What Really Threatens Credit Unions
Tony DeSanctis at Cornerstone Advisors sees stablecoin’s strongest use case in global transfers and remittances.
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“The clearest opportunity is in cross-border payments,” says the Scottsdale, Ariz.-based  consultancy’s senior director of client education and knowledge strategy. 

Domestic adoption is less certain, DeSanctis says. “There's buzz around merchant acceptance, but consumers don’t have a strong incentive to adopt yet another payment method. Unless it's cheaper than card transactions, adoption will be slow,” the veteran consultant told CUbroadcast in a recent phone call.

That said, stablecoin offer a compliant, programmable alternative as credit unions build digital bridges for members. And the real threats, DeSanctis says, are already here. He points to:

• Durbin regulation changes, especially since July 2023.
• Real-time payments (RTP) and pay-by-bank options, which bypass cards.
• Buy Now Pay Later (BNPL) via apps like CashApp and PayPal, which charge as little as 1% in merchant fees.

Stablecoin may shift revenue, but for now, it’s not the tsunami, it’s just a flashing light.

“They’re like dirt on your garage floor when your house is flooding,” DeSanctis says of the cryptocurrency. “Focus on the flood first.”

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