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Federal Regulator Says Credit Unions Can Partner With Crypto Providers
The new guidance will allow them to support the buying and selling of cryptocurrencies.
Updated May 11, 2023, 3:22 p.m. Published Dec 16, 2021, 9:47 p.m.
Federally insured credit unions (FICUs) can partner with third-party digital asset service providers, the National Credit Union Administration (NCUA) announced Thursday.
“This includes facilitating member relationships with third parties that allow FICU members to buy, sell and hold various uninsured digital assets with the third-party provider outside of the FICU,” according to the statement from the NCUA. The NCUA is a U.S. regulator that oversees credit unions, acting as a counterpart to the Office of the Comptroller of the Currency (OCC), which regulates national banks.
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The NCUA said it wants to offer clarity around the existing authority that FICUs have when it comes to building relationships with third-party digital asset providers. The NCUA said further guidance may be necessary as digital assets and technologies evolve, and the association will continue to study and address issues that arise.
Kyle Hauptman, vice chair of NCUA, said the guidance was the result of two things that have been happening in the marketplace.
“Credit unions have been watching endless outflows of cash to crypto exchanges, and many people would rather use their primary financial institution for their first foray into crypto investing,” Hauptman told CoinDesk. “Today’s guidance helps both concerns and gives a new revenue stream to credit unions [that] want to try it out. Financial services has always been ‘adapt or die’ and I don’t want credit unions to go the way of Blockbuster Video because we, the regulators, prevented innovation.”
Federal credit unions may continue to act as finders to bring together their members with providers of third-party services, including those related to digital assets, the NCUA added.
In July, the NCUA published a request for information (RFI) after its three board members unanimously voted to do so. These requests asked how distributed ledger technology (DLT) and decentralized finance (DeFi) might affect the credit union system, and how the NCUA’s regulated entities might interact with these technologies and other crypto-related tools.
Read more: Bitcoin at Your Bank: NYDIG Names First 2 Firms to Roll Out BTC Buys
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