US Credit Union Regulator Wants to Know How Its Firms Handle DeFi
The National Credit Union Administration (NCUA) is formally looking for more information about how the financial institutions it regulates can interact with the crypto industry.
The NCUA published a request for information (RFI) on Thursday after its three board members unanimously voted in favor, asking how distributed ledger technology (DLT) and decentralized finance (DeFi) might impact the credit union system, and how its regulated entities might interact with either of these technologies or other crypto-related tools.
The NCUA is a federal U.S. regulator overseeing credit unions, acting as a counterpart to the Office of the Comptroller of the Currency (OCC), which regulates national banks.
With this, every major federal banking regulator is now looking at crypto. In addition to the NCUA and the OCC, the Federal Deposit Insurance Corporation (FDIC) published a RFI in May asking similar questions around crypto, while the Federal Reserve is seeking feedback on a proposal to allow fintech and crypto firms access to its master accounts.
There’s also growing scrutiny around digital assets from regulators, with stablecoins and securities-backed tokens in particular starting to garner attention. The OCC, the Fed and the FDIC are also forming an interagency team to examine crypto.
In its RFI, the NCUA asked about insurance, risk/compliance, operations, supervision and related areas where the NCUA might be involved if a credit union wants to offer a crypto-related service.
The RFI also included a question around stablecoins and how those accounts might be insured.
“Are there distinctions or similarities between stablecoins (cryptocurrencies that are backed by a currency like the U.S. Dollar and are 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?” the RFI asked.
The general public has 60 days to weigh in on the questions.
NCUA Vice Chair Kyle Hauptman first called for his agency to take a look at crypto earlier this year. He pointed to the OCC’s work in letting national banks interact with stablecoins and provide custody services for cryptocurrencies as a potential example for credit unions, though he said any NCUA guidance might not match up exactly with the OCC.
“At some point, we’ll speak with NCUA staff about doing a side-by-side with what the OCC did and see what we do or don’t want to adapt for credit unions. NCUA benefits a bit from ‘somebody else went first,’ so we can, where appropriate, build on the OCC’s experience,” he told CoinDesk in March.Source