Credit Union Regulator Gives Preliminary Go-Ahead on Crypto Partnerships

Credit unions have received their first green light from the National Credit Union Administration to partner with crypto firms to help members to manage digital assets.

Many credit unions were hesitant to delve into the cryptocurrency market amidst concerns of regulatory backlash from the NCUA. The agency offered clarity this month to address concerns voiced by many in the credit union industry.

Earlier this month, Visa launched its crypto advisory service that seeks to help its community depository clients assess different digital asset options, as well as develop and test novel product offerings.

According to research conducted by the card network, 94% of the 6,000 surveyed consumers that make financial decisions in their households are aware of cryptocurrency, with 33% of that group either purchasing or using cryptocurrency.

“Nontraditional players like PayPal and Venmo are leveraging crypto as a foot in the door to draw more consumers to them … with the ability to develop a banking relationship with as little as a mobile app,” said Stephen Bohanon, founder and chief strategy and sales officer of Alkami, a cloud-based digital banking platform that has partnered with roughly 170 banks and credit unions across the U.S.

These nonbank technology providers are as much a threat to credit unions as any bank is, according to Bohanon.

“I'm afraid that if credit unions say that they're going to do things the way they always do and ignore crypto, they're going to just see the continued disintermediation of members away from credit unions and into these direct-to-consumer fintechs," Bohanon said.

Source: American Banker