As digital assets continue to reshape the global financial landscape, credit unions are facing a critical question: what role will stablecoins play in the future of payments, member engagement, and deposit growth?
That question took center stage during a recent Spark session hosted by Deda Sphere, where industry experts in compliance, regulation, and financial innovation came together to explore how stablecoins are moving from the margins of finance into the mainstream.
Moderated by Deda Sphere Vice President of Digital Solutions Jami Jennings, the discussion featured three respected voices with deep regulatory and operational expertise:
- America’s Credit Unions Head of Compliance, Marilyn Barker
- America’s Credit Unions Federal Regulatory Compliance Counsel, Judy Dahn
- Self-Help Credit Union Fintech and Digital Innovation Leader, Jacob Williams
Together, the panelists offered clarity, caution, and forward-looking insight for credit unions navigating an increasingly regulated digital asset environment.
What exactly is a stablecoin?
As Williams shared, at its core, a stablecoin is a digital asset designed to maintain a stable value-most commonly pegged 1:1 to the U.S. dollar. Unlike more volatile cryptocurrencies such as Bitcoin or Ether, stablecoins are built for practical financial use, including payments, remittances, and everyday transactions.
Williams then grounded the concept in practical terms:
“The simplest way to think about stablecoin is that it’s just another digital asset—a non-tangible asset that has a value tied to some type of currency.”
That simplicity is key. Stability, combined with speed, cost efficiency, global usability, and transaction traceability, has fueled adoption worldwide. While U.S. regulation has historically lagged, usage has expanded rapidly in regions where currencies are unstable or cross-border payments are prohibitively expensive.
Why stablecoin adoption is accelerating
The panelists identified several forces converging to push stablecoins further into the financial mainstream.
Shifting consumer behavior is one. Younger members are increasingly bypassing traditional cards in favor of peer-to-peer payments and digital wallets.
Remittances are another driver. As Barker explained:
“Having a stablecoin-like payment vehicle is meaningful, especially in countries where currency conversion issues can be incredibly costly or politically unstable.”
Merchant pressure is also growing, particularly among small businesses seeking alternatives to rising interchange and transaction fees.
But the most significant shift, the panel agreed, is regulatory clarity—a long-standing barrier that is beginning to lift.
A regulatory turning point for credit unions
For many credit unions, uncertainty around regulation has been the primary obstacle to engaging with digital assets. That dynamic is beginning to change.
Recent federal action has established foundational requirements for payment stablecoins, including full reserve backing, immediate redeemability, and issuance by regulated entities. Dahn underscored why this matters:
“Payment stablecoins must be backed by one dollar in reserve for every stablecoin issued. This ensures stability and immediate redeemability.”
For credit unions, this represents a shift from speculation to structure—creating clearer parameters for evaluating whether and how stablecoins may serve member needs.
Can credit unions issue or custody stablecoins?
According to the panelists, credit unions can participate, provided they do so thoughtfully and within defined guardrails.
Credit unions may issue stablecoins through subsidiaries such as CUSOs, pending regulatory approval, and they may custody stablecoins for members. Current proposals emphasize strong governance, liquidity management, and risk controls.
Dahn characterized this moment as foundational rather than final, calling it: “the first major step,” and noting that additional regulatory phases are expected as adoption and use cases evolve.
Blockchain as a compliance advantage
While public discourse often frames crypto through the lens of volatility and speculation, Barker highlighted blockchain’s compliance and security advantages—particularly for regulated financial institutions.
“Blockchain makes the ledger immutable and far less prone to breaches,” Barker said. “It also helps combat synthetic identities, account takeovers, and deepfake-enabled fraud.”
The panel outlined several benefits relevant to credit unions:
- Immutable transaction records
- Enhanced Know Your Customer and suspicious activity monitoring
- Faster, audit-ready access for examiners
Barker also offered a glimpse of what examinations could look like in the future:
“Imagine an exam where regulators can review your decentralized ledger without needing access to your systems. That could change the nature of examinations entirely.”
Where should credit unions begin?
While the opportunities are significant, the panelists emphasized that credit unions do not need to rush.
Williams noted that member demand is already emerging, pointing out that:
“One in five consumers already uses digital assets in some form.”
The recommended approach Williams provided is phased and intentional:
- Survey your members with particular focus on younger adults or those who have younger adults in their circle.
- Engage law makers particularly on buy and pay later trends, and how reserves will be tracked as well as fee limits for closed loop and public coins.
- Complete a product vision document that includes features for issuance, education, and achievements (e.g., gamification) that link members’ needs to your mission, vision, and values.
- Collaborate with your service providers (e.g., payment processors) to see what they are thinking and how they are approaching Stablecoin or Digital Asset ecosystems in general.
- Assess what a private-closed-loop digital asset could do with peer-to-peer credit unions, shared branching or small business marketplaces (like Goodbuy) to offset cost to serve as well as build up member financial health.
Preparation—not speed—was the consistent theme.
Five key takeaways for credit unions
The discussion reinforced five essential insights:
- Stablecoins are no longer fringe—they are becoming embedded in global finance.
- Regulatory clarity has opened the door for responsible participation.
- Blockchain technology can strengthen Anti-Money Laundering and fraud defenses.
- Member expectations are shifting, particularly among younger and underserved populations.
- Early preparation will position credit unions for long-term success.
Preparing for what’s next
Stablecoins represent something rare in digital finance: a solution that is fast, global, regulated, and accessible without the volatility typically associated with cryptocurrency.
As the panelists emphasized, this conversation is not about speculation. It is about readiness preparing for the future of payments, deposits, and financial inclusion.
Credit unions that begin building foundational understanding today will be better positioned to meet member needs tomorrow, as digital assets become increasingly woven into the financial ecosystem.
Continuing the conversation
Deda Sphere regularly hosts Spark sessions for its customers, creating space for candid conversations with industry leaders on emerging topics that matter—from regulation and risk to innovation and member experience. These sessions are designed to spark ideas, encourage collaboration, and help credit unions prepare for what’s ahead.
Deda Sphere is grateful to the panelists from America’s Credit Unions and Self-Help Credit Union for sharing their expertise and perspectives.
Earlier this month, while the Deda Sphere team attended the Governmental Affairs Conference in Washington, D.C., hosted by America's Credit Unions, the topic of stablecoins surfaced in broader industry discussions as well. These themes carried beyond the Spark session and into national policy conversations, where leaders from across the country gathered to advocate for America’s credit unions and the members they serve—reinforcing that innovation, regulation, and advocacy are no longer separate conversations.
At Deda Sphere, we are proud to support that collective voice. Powering your why means creating platforms to learn, explore emerging ideas like stablecoins, and stand alongside the credit union movement as a committed business advocate.
As the financial landscape continues to evolve, our role remains focused on fostering informed dialogue, strengthening industry understanding, and supporting credit unions as they evaluate what’s right for their members and communities.
Deda Sphere delivers integrated core processing and digital banking solutions built for credit unions. With a modular, secure, and connected technology ecosystem—from next-generation core platforms to mobile banking, lending, and member experience tools—Deda Sphere helps credit unions enhance service, streamline operations, and accelerate growth. Headquartered in the U.S. and backed by Dedagroup, a global technology leader, Deda Sphere is committed to driving innovation and long-term relevance for credit unions nationwide.
