WASHINGTON—Cryptocurrencies and other forms of digital payments will not fade away and may threaten credit union deposits, according to CUNA Senior Economist Ligia Vado, whose analysis was released as part of the latest CUNA Economic Update.
“It is important to recognize that this space, this market for digital payments, is here to stay,” said Vado. “Consumer preference towards more digital forms of payment was accelerated by the COVID-19 pandemic.”
Analyzing recent CUNA polling regarding who is using cryptocurrencies, Vado noted that credit union members are more than twice as likely as non-members to own a cryptocurrency.
Vado also analyzed the risks that cryptocurrencies present for users and for credit unions.
“The main risk for credit unions in the extreme case in which consumers massively adopt digital forms of payments, is the risk of disintermediation. This will mean that consumers would not be incentivized to keep their deposits in credit unions, and so credit unions will see a reduction in their funding sources…,” she explained.
Vado added that she believes credit unions should be granted the flexibility to offer digital asset custodial and management services to their members. As CUToday.info has reported, a number of credit unions already offer such services to their members.
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