The crypto investment firm said draft rules on yield, tokenized credit union shares and reserve assets go beyond Congress’s intent and could limit issuer flexibility.
Paradigm has asked the NCUA (U.S. credit union regulator) to revise parts of its proposed GENIUS Act stablecoin rules, arguing the draft stretches beyond the law passed by Congress and could create unnecessary hurdles for issuers. In a comment letter submitted on Friday, July 17, the firm said it broadly supports the agency’s effort but objected to provisions covering yield-bearing stablecoins, single-brand limits, reporting requirements, tokenized credit union share accounts and reserve assets. Paradigm said the law bars yield distributed directly by issuers, not by third parties or indirect arrangements, and urged explicit protection for tokenized member shares so they continue to be treated as deposits rather than payment stablecoins. It also called for technology-neutral treatment of reserve assets, meaning tokenized versions of eligible reserves should be treated the same as traditional holdings and should not face quantitative caps. The filing comes as U.S. regulators, including the OCC (Office of the Comptroller of the Currency) and FDIC (Federal Deposit Insurance Corporation), work on implementing the GENIUS Act and gather feedback from industry participants. Paradigm said the final rules will shape how reserves are managed, how tokenized deposits are classified and how much operational flexibility regulated digital dollar products retain.