Corporate Central Credit Union Momentum 2026: A Focus on Stablecoin and Other Digital Assets
By John San Filippo
Finopotamus was onsite for the
Corporate Central Credit Union Momentum 2026 conference, held Oct. 13-15, in Madison, Wis. While the conference as a whole covered a wide range of topics, the closing day’s half-day session was devoted exclusively to digital assets, primarily stablecoin.
The first session of the day, The Digitization of the Dollar, was presented by Larry Pruss, Managing Director, Emerging Payment Technologies for SRM. That was followed by Stablecoin and Digital Finance Through the Regulatory and Supervisory Prism, which was presented by NASCUS President and CEO Brian Knight. Finally, the two sat down for a “fireside chat” that included questions from the audience.
The Inevitability of Digital Money
Although Pruss and Knight approached digital assets from different perspectives, both agreed that the digitization of money is no longer a theoretical concept. Knight acknowledged that regulatory bodies naturally view emerging financial technology through a cautious lens, yet he urged credit union executives to accept the reality of the market.
“It is a technology advancement and technology always wins,” Knight said. “You can be resistant to this. I’m going to point out some of the concerns from a policy and regulatory standpoint, but it is coming. And to resist it, in my view, is to stand on the beach and yell at the tide not to come in.”
Pruss framed the current shift as the natural next step following the historic digitization of communication and music. He noted that traditional finance is now confronting two distinct forms of digital tokens: stablecoins and tokenized deposits. While many consumers conflate stablecoins with volatile cryptocurrencies like bitcoin, Pruss clarified the distinction.
“They’re not really cryptocurrencies, although they came from the cryptocurrency world,” Pruss explained. “They are a digital representation of something of value, which means that they are more of a digital token than, say, a cryptocurrency.”
Because stablecoins are pegged one-to-one to the U.S. dollar and backed by cash and short-term U.S. Treasuries, they do not fluctuate in price. Pruss noted that this stability allows users to spend them without triggering the capital gains tax reporting obligations associated with spending appreciating cryptocurrencies.
Stablecoins vs. Tokenized Deposits
A central theme across all three sessions was the structural and regulatory difference between stablecoins and tokenized deposits. Pruss compared the two options to the early days of corporate computing, when companies feared the open internet and built closed-loop intranets instead.
“Tokenized deposits are that closed-loop system,” Pruss said. “You have to have participants on both sides. It’s fairly limited today. That doesn’t mean that won’t be the case five years from now. But right now, if you want to move money internationally through lots of endpoints, you’re looking at stablecoins. They are the open version.”
Stablecoins operate on permissionless blockchains where anyone can participate, whereas tokenized deposits sit on permissioned blockchains requiring participant approval. From a regulatory standpoint, Knight noted that tokenized deposits are much simpler for credit unions to adopt immediately because they exist within the established fractional reserve banking system and retain federal share insurance.
“You all could start tokenizing deposits tomorrow,” Knight told the audience. “You could have started tokenizing deposits two years ago. You can tokenize deposits without becoming a PPSI (permitted payment stablecoin issuer).”
During the fireside chat, Knight admitted that he previously favored tokenized deposits over stablecoins because they solve a major point of consumer friction: waiting four to five days to transfer funds between different financial institutions.
“Think about if we built a tokenized deposit system for the entire credit union system,” Knight said. “So, a selling point for credit unions could have been, ‘Hey, credit union member, you can transfer an unlimited amount of money really instantaneously to an individual whose accounts are at another credit union.’”
A New Global Payment Rail and Use Cases
Pruss encouraged executives to view stablecoins primarily as a remarkably fast, low-cost payment rail. While domestic instant payment rails like FedNow and RTP exist, they do not work internationally and lack native programmability. Stablecoins, by contrast, settle atomically on shared ledgers and utilize smart contracts to automate complex processes, such as automatically releasing a property title the moment a final mortgage payment settles.
According to Pruss, global stablecoin volume currently sits between $80 trillion and $100 trillion annually. While most of that volume remains tied to automated crypto trading, 10% to 14% represents true payment activity. He highlighted several key factors driving adoption:
Cross-Border Remittances and B2B Payments: Roughly 18% of the U.S. workforce regularly sends money to family abroad, historically losing 6% to 8% in fees through traditional services. Small and medium-sized businesses also rely on international suppliers who want to be paid in U.S. dollars.
The Gig Economy: With 30% of the working population tied to gig work, workers increasingly demand instant payouts for daily wages rather than waiting for biweekly paychecks.
Agentic Commerce: As artificial intelligence agents begin shopping and executing machine-to-machine transactions on behalf of users and businesses, micro-transactions are exploding. “Imagine these transactions being like less than a cent transactions that are happening a billion times a day,” Pruss said. “Does anyone know any payment mechanism we have today that can do less than a cent transaction? Doesn’t exist. Does exist with stablecoins.”
Disintermediation, Deposit Flight and the Yield Loophole
Because stablecoins reduce the number of intermediaries in a financial transaction from three or four to one or two, they threaten the interchange fee income that credit unions rely on. Pruss compared the rush among payment providers to musical chairs.
“It wasn’t super important you were the first one that got in your chair, but it was super important you were not the last one that got in your chair,” Pruss warned. “There are going to be a lot of people who are going to be stuck when that music stops and they’re the last one grabbing a chair. And if you’re in that position, you will lose access to participating in payments, and that could be a real problem.”
Beyond interchange loss, both speakers warned of potential deposit flight. Under the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), which passed Congress in 2025, stablecoin issuers must maintain 1-to-1 reserves in cash or short-duration Treasuries of 93 days or less. Because these assets are segregated and cannot be lent out or rehypothecated, stablecoins operate like full-reserve narrow banks. Pruss cited a U.S. Treasury study estimating that stablecoins could eventually drain up to $6.6 trillion, or roughly 20%, from the U.S. deposit base, especially from businesses holding uninsured balances above $250,000.
While the GENIUS Act prohibited stablecoin issuers from paying direct interest yield to holders, a subsequent market structure bill known as the CLARITY Act (formally the Digital Asset Market Clarity Act of 2025 or H.R. 3633) stalled in Congress, leaving what the banking lobby calls the “yield loophole” intact. Pruss explained that issuers like Circle can still share their Treasury yield with crypto exchanges, which in turn pass a percentage of that yield along to users. Furthermore, holders can earn yield through decentralized finance (DeFi) liquidity contracts or merchant rewards.
Knight outlined a potential “black swan” nightmare scenario (an unpredictable, high-impact occurrence that seems obvious only in hindsight) for depository institutions in which retail giants like Walmart and Amazon partner on an approved stablecoin.
“Now we say, you get a 5% discount if you just use Brian’s stablecoin, the approved stablecoin of Amazon and Walmart,” Knight said. “Hold $500, $1,000 of Brian’s stablecoin in your wallet minimum at all times, you get a 7% discount. Now you’ve created an incentive for your members to have their paycheck deposited into the institution, then immediately moved out into their stablecoin wallet.”
If liquidity drains from local credit unions and consolidates at the systemically important banks holding stablecoin reserves, Knight warned that rural communities could face severe credit contraction, and credit unions would see an exponential increase in their cost of funds.
The NCUA Regulatory Framework and Dual Chartering Strain
While the GENIUS Act established high-level guardrails, Knight noted that federal regulatory implementation remains in flux. Throughout 2026, the NCUA issued a series of proposed rulemakings covering stablecoin licensing, reserves, cybersecurity, and Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance.
Knight highlighted a critical restriction in the NCUA’s February 2026 proposal: Federally insured credit unions cannot issue stablecoins directly and must instead operate through an NCUA-licensed CUSO. Furthermore, while banks under $10 billion can partner with state-licensed PPSIs, credit unions cannot.
“By NCUA’s rules, if you are a federally insured credit union, you’ll only be able to go through the NCUA licensing system through your CUSO,” Knight said. “You will not have the option like banks do of engaging with a state-licensed issuer.”
Knight, however, pointed out one distinct advantage for state-chartered credit unions regarding CUSO capitalization. While federal credit unions are statutorily capped at investing or lending 1% of their paid-in and unimpaired capital and surplus to CUSOs, state-chartered credit unions are governed by state laws that allow limits of 5% to 10%.
“We have more flexibility at the state level,” Knight said. “Even though we as state-chartered credit unions won’t have the option because of NCUA’s rules in investing in a state-licensed PPSI, in an NCUA-licensed CUSO, as a state-chartered credit union, depending on the state we are in, we have a higher ability to capitalize our CUSO that would engage in this and be going down this path.”
Knight also alerted attendees to two recent regulatory developments. First, the NCUA joined federal banking agencies in issuing a proposed rule on third-party due diligence that replaces the NCUA’s foundational 2007 guidance, offering tailored examination standards based on institutional risk. Second, in early October, the NCUA proposed adding 26 new fields to the March 2027 Call Report to track credit union custody of third-party assets, crypto keys, member wallets, CUSO exposure, and stablecoins held on the balance sheet.
Market Friction, Depegging and Consumer Protection
During the fireside chat, audience members questioned how everyday consumers would navigate stablecoin interoperability, point-of-sale acceptance, and consumer protections. Pruss explained that clearinghouse consortiums are emerging to allow different bank, credit union, and merchant stablecoins to clear at par, while Visa and MasterCard are already linking debit cards directly to stablecoin wallets to abstract away complexity at the checkout counter.
Knight cautioned that early retail adoption could still face point-of-sale recognition friction, comparing it to the early days of the Discover Card in the 1980s. He also emphasized that despite 1-to-1 reserve mandates, a stablecoin is an asset backed by a dollar rather than an actual fiat dollar, leaving it vulnerable to depegging and liquidity choke points.
Pruss recounted how Circle’s USDC temporarily lost its dollar peg when Silicon Valley Bank collapsed on March 10, 2023, because $3.2 billion of Circle’s cash reserves were trapped at the failed institution. Knight added that exchange-level market panic or strict issuer redemption policies – such as Tether refusing to directly redeem balances under $100,000 – could force retail holders to sell their tokens at a discount on secondary exchanges.
Consumer protection and privacy also remain major flashpoints in Washington. Stablecoin transactions are immutable and are not covered by Regulation E, raising questions about who bears the liability for fraudulent transfers or mistyped wallet addresses, Pruss noted. Furthermore, while Congress banned the Federal Reserve from issuing a Central Bank Digital Currency (CBDC) until at least 2030 largely over government surveillance concerns, Pruss reminded the audience that public blockchains are pseudo-anonymous rather than private.
“Law enforcement love doing stablecoin investigations because you can trace it from where it started to where it ended and everyone that touched it in between,” Pruss said. “But that creates some problems for us as financial institutions, as our members are used to a certain level of privacy when it comes to financial transactions.”
Strategic Next Steps for Credit Unions
Despite the regulatory complexities and systemic risks, Pruss pointed out that traditional financial players and fintechs – including Stripe, PayPal, Fiserv, FIS, Visa, and MasterCard – have already invested $14 billion into building stablecoin infrastructure. When credit union executives claim their members are not asking for digital asset capabilities, Pruss pushes back with a retail analogy.
“When I walk in the store and the store doesn’t have something that I want, do I go to the manager of the store and say, ‘Hey, you don’t have this item in; can you get this item in for me?’ No, I don’t,” Pruss said. “I walk down the street to the store that has it and I get my item. So, for those members that have those needs, they’re not asking you now. They just go to where they can get it.”
Rather than attempting to build infrastructure from scratch, Pruss advised credit unions to incorporate stablecoins into their broader payment strategies and take a phased approach through established partners. He praised credit union industry pioneers including St. Cloud Financial Credit Union, Alloya Corporate Federal Credit Union, and the joint initiative between Corporate Central Credit Union, TruStage, and BlockTime Financial to bring stablecoin and shared-ledger capabilities to credit unions.
“Make sure you’re thinking about this as a payment strategy and incorporating it in your payment strategy,” Pruss concluded. “These are payment devices. They may not be here immediately, but they certainly are coming.”
