- NCUA will allow fLiterally secured credit unions to partner with crypto service providers.
- This movement will help them maintain their competitive edge and maintain relationships with their members.
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news: Recently managed by the National Credit Union (NCUA) announce That Federally Insured
Entering into partnerships with third-party crypto service providers. These guidelines apply to secured credit unions with federal or state covenants—and states can still restrict the activities of the credit unions they regulate.
More on this: The NCUA released its letter last month in response to a July 2021 request for information for public comments on the digital asset space.
- The US regulator said it will review crypto-related partnerships just as it does other types: it requires credit unions to conduct risk assessments, proper due diligence, and monitoring.
- Credit unions will also need to include disclosures in marketing and advertise that crypto products lack federal insurance and are offered by third parties.
Bets: Allowing credit unions to get into cryptocurrency will help them stay competitive and maintain relationships with their members, NCUA Vice President Kyle Hauptmann said in an interview with CoinDesk.
The vice president also warned that credit unions could have faced an existential challenge had the regulator not given their consent, telling CoinDesk, “I don’t want credit unions going the way of Blockbuster Video because we, regulators, have blocked innovation.”
the opportunity: while encryption He had a suspicious reputationIt is also gaining traction with an increasing number of people, according to a recent visa study. The survey found that financial institutions can leverage with clients by jumping in:
- 85% of cryptocurrency owners said they are interested in buying cryptocurrency from their banks.
- 39% of owners answered that they would switch to banks that offer this.
Crypto partnerships may benefit credit unions by enabling them to persuade members to spend more time within their ecosystems rather than moving their deposits elsewhere. As Hauptmann told CoinDesk, “Credit unions have been watching endless cash outflows into crypto exchanges, and many people prefer to use their initial financial institution on their first foray into cryptocurrency investing.”
The credit unions’ (FI) core financial institution status and the trust they have established with their clients will help them grow the business within the digital asset space. For example, the 2021 Bank Digital Trust Report have found That US customers who had above-average digital trust with their banks were more likely to get new accounts or products from them versus those with below-average digital trust.
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