The National Credit Union Administration (NCUA) has issued a formal request for additional information on how the financial institutions it governs might deal with the cryptocurrency business.
The NCUA issued a request for information (RFI) on Thursday after its three board members unanimously voted in favor, requesting information on how distributed ledger technology (DLT) and decentralized finance (DeFi) might impact the credit union system, as well as how its regulated entities might interact with these technologies or other crypto-related tools.
The Major Credit Union Administration (NCUA) is a federal government agency that regulates credit unions in the United States. It is similar to the Office of the Comptroller of the Currency (OCC), which oversees national banks.
As a result, every major federal banking regulator is now investigating cryptocurrency. In addition to the NCUA and the OCC, the Federal Deposit Insurance Corporation (FDIC) issued a request for information in May asking similar concerns about cryptocurrency, and the Federal Reserve is collecting opinions on a plan to provide fintech and crypto firms access to its master accounts.
Regulators are also paying more attention to digital assets, with stablecoins and securities-backed tokens, in particular, attracting their attention. In addition, the OCC, the Fed, and the FDIC are forming an interagency committee to look into cryptocurrency.
The NCUA requested information on insurance, risk/compliance, operations, supervision, and other areas where the NCUA might be involved in a credit union wishes to offer a crypto-related service in its RFI.
A query about stablecoins and how those accounts might be insured was also included in the RFI.
“Are there distinctions or similarities between stablecoins (cryptocurrencies backed by a currency such as the US dollar and designed to have a stable value compared to other cryptocurrencies) and stored value products where the underlying funds are held at FICUs and for which pass-through share insurance may be available to members in limited scenarios?” asked the RFI.
The public will have 60 days to respond to the questions.
Kyle Hauptman, Vice Chair of the NCUA, first requested that his agency investigates cryptocurrency early this year. He cited the OCC’s efforts in allowing national banks to interface with stablecoins and provide cryptocurrency custody services as a possible model for credit unions, but he cautioned that any NCUA guidelines might not be identical to the OCC’s.
“At some time, we’ll talk to NCUA personnel about doing a side-by-side comparison with what the OCC did to determine what we want to change for credit unions and what we don’t want to adapt for credit unions. “NCUA gains a little from ‘someone else went first,’ so we can draw on the OCC’s experience when appropriate,” he told us.