Cryptocurrency has generated significant interest and controversy in recent years, captivating investors with its potential for wealth creation and dramatic price fluctuations. Bitcoin, for instance, has experienced both massive losses and remarkable gains, making it particularly appealing to risk-seeking investors. In 2021, federal regulators in the United States granted credit unions (CUs) permission to partner with cryptocurrency providers, opening the door for these financial institutions to enter the dynamic cryptocurrency market.
The prospect of offering cryptocurrency services has garnered considerable attention from CU customers, with 57% of cryptocurrency owners expressing interest in transacting through their FIs. Additionally, 67% of CU members are actively seeking more payment options. The “Credit Union Tracker®” explores the possibilities and challenges faced by CUs as they consider providing cryptocurrency services to their members.
The cryptocurrency landscape is constantly evolving, and governments around the world are ramping up their efforts to regulate this industry. Canada, for example, recently introduced changes to its capital holdings laws, categorizing cryptocurrency assets into four different types. This move aims to simplify FIs’ approach to managing various cryptocurrency risks and prevent Canadian institutions from experiencing the same issues that led to the collapse of firms like Silvergate and Signature Bank in the U.S. last year. The new regulations, which have completed the public review phase, will take effect in 2025.
WeStreet Credit Union, based in Oklahoma, has become the first CU to partner with Etana Custody and CryptoFi to offer cryptocurrency trading to its members. Etana plans to expand cryptocurrency trading to several more credit unions in the near future, marking a significant expansion of this service beyond traditional banks and FinTech companies.
Considering the growing popularity of cryptocurrencies among CU members, it is essential for credit unions to meet their expectations in this realm. Cryptocurrencies have become an attractive investment option for members looking for novel and potentially lucrative opportunities. A recent study found that 26% of CU members already hold some form of cryptocurrency. Therefore, CUs stand to benefit by catering to this member base, and many have already taken steps to provide cryptocurrency services.
This month’s PYMNTS Intelligence delves into what CU members expect from their institutions when it comes to cryptocurrency and why CUs are increasingly adding cryptocurrencies to their portfolios. By understanding and addressing the needs of their members, CUs can position themselves as innovative and forward-thinking financial institutions in the evolving world of cryptocurrency.
The “Credit Union Tracker®,” in collaboration with PSCU, offers insights into the possibilities and challenges faced by credit unions as they venture into the realm of cryptocurrency services.
