U.S. Credit Unions Allowed to Work With Crypto Firms

December 18, 2021 - Around 2 mins mins to read

According to recent regulatory advice, federally insured credit unions (FDICs) are able to develop agreements with digital asset businesses. This implies that credit unions in the United States can recommend its members to digital asset services. Credit unions serve 126 million American people, or little less than 39 percent of the total population.

U.S. Credit Unions Allowed to Work With Crypto Firms — *Source: GETTY IMAGES*

According to recent regulatory advice, the FICUs are now allowed to collaborate with digital asset services.

According to a letter from the NCUA dated December 16, credit unions already have the capabilities to establish connections with third-party digital asset providers. This comprises services that enable customers to purchase, sell, and keep uninsured digital assets.

The government agency’s letter reads:

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

It then establishes the terms under which credit unions might refer members to other services. Credit unions, in particular, can direct members to non-deposit services as long as the risks are comparable to those of a credit union. These services must also be beneficial and rationally tied to the union’s other business operations.

Other US agencies, including as the SEC, CFTC, and FinCEN, have power over some crypto activities, according to the NCUA. Credit unions, it said, “should be aware of this fact,” and it will “continue to study and address these issues.”

Only approximately 126 million Americans are members of unions, accounting for less than 39 percent of the US population.

Nonetheless, this change expands the manner in which banks and financial organizations are officially permitted to use cryptocurrency. In September 2020, the OCC approved banks’ use of stablecoins. In the same year, the SEC and OCC released declarations authorizing banks to function as digital asset custodians.

Furthermore, Texas officials approved the storage of bitcoin for its consumers in June 2021.

Patrick

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