Federally Insured Credit Unions Can Now Work With Crypto Firms

The Federally insured credit unions or FDICs are now able to work with crypto firms that offer digital asset services according to the new regulatory guidance so let’s read more in our latest cryptocurrency news today.

This means that the US Credit unions can now refer their members to digital asset services. Federally Insured Credit Unions serve 126 million American citizens that represent under 39% of the US population. The letter from the National Credit Union Administration says that the credit unions have existing authority to form relationships with third-party digital asset services which includes services that allow clients to buy, sell and hold uninsured digital assets:

“As an insurer, the NCUA does not prohibit FICUs from establishing these relationships.”

It goes on to establish conditions in which credit card unions are able to refer members to other services. These unions refer members to a non-deposit service so long as it offers similar risks to the credit union and these services have to be useful and related to the credit union’s other business activities. The FCIUs are not limited in the services as they can refer members to but have to use sound judgment and due diligence which leaves unions free to refer members to crypto services. The NCUA noted that US regulators like CFTC, SEC, and FinCEN has authority over some crypto activity and noted that these unions should be cognizant of the fact and that it will continue to study and address these issues.

The news could be minor as only about 126 million Americans are members of the credit unions that represent less than 39% of the population of the US. The development added to the ways where banks and financial institutions are allowed to work with crypto and the OCC permitted the banks to work with the stablecoins in 2020. The SEC and OCC issued statements that allow banks to act as digital asset custodians in the same year. Texas regulators allow banks to store crypto for their clients in June 2021 and the recent statements from the Federal Reserve, FinCEN and OCC suggest that the role of banks on the crypto market could be refined by 2022 after the latest agency discussion.