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The Biden Administration’s Executive Order for digital assets observed that one in six adult Americans are involved with cryptocurrency, while other surveys place this figure closer to one in three. At the same time, a solid majority of Americans indicate they’d prefer to conduct crypto dealings through their financial institution.

This seems like a dream scenario for banks and credit unions looking for opportunities to deepen client relationships and pursue new sources of fee income to replace the overdraft/NSF revenue and interchange that is increasingly under threat.

The Biden Administration issued its anticipated executive order seeking to coordinate efforts among federal agencies to craft a national policy for digital assets.

While some pundits are worried about the impact of regulation, we assert that this effort brings digital assets, including cryptocurrency, into the mainstream, which should be a positive for financial institutions looking to operate in the space. 

The CUNA Governmental Affairs Conference was in-person for the first time in three years, giving many credit union executives a long-overdue chance to have face-to-face meetings.

SRM made the most of the week, engaging with scores of executives, getting a sense of their challenges and opportunities, and lining up discussions to assist in crafting strategies and finding solutions for both.

In late July, the National Credit Union Administration (NCUA) issued a request for comment on the current uses of digital assets and their potential impact on the financial system. The NCUA plans to use this input to help shape its role in safeguarding consumers and the system as these emerging technologies evolve.

The request largely mirrors previous outreach by bank regulators, although the NCUA expanded its scope to include the rapidly growing field of decentralized finance (DeFi). Unfortunately, the credit union response has been muted, so the NCUA extended its deadline for comments to October 27. SRM encourages credit unions to make their voices heard on this strategically important issue.

SRM responded to the NCUA, which you can read here. Our NCUA letter serves as a solid primer on the cryptocurrency topic and includes several examples of existing banking initiatives, the highlights of which we’ll summarize below.