HONOLULU, Hawaii—NCUA Board Chairman Rick Metsger addressed the advantages—and concerns—Blockchain brings to credit unions.
Speaking at the Western States Summit Roundtable, Metsger touched on several issues of important to CUs, Blockchain being one.
“Fintech can also open a whole new world to the regulatory process. The growth of cloud-based distributed ledger technology, such as Blockchain, challenges conventional transaction processes as well as regulatory oversight,” said Metsger.
The technology has the possibility to “significantly reduce” a credit union’s back office expense, but raises other challenges, noted Metsger.
“How is compliance with requirements such as the Bank Secrecy Act ensured? While the technology adds new layers of cyber protection over conventional transactional interfaces, there are also new risks that could inadvertently facilitate the financing of terrorism, organized crime, and drug cartels,” Metsger said. “It is incumbent on us, as regulators, to be actively involved in understanding these changes in financial services and evolve our regulatory processes to partner with credit unions to maximize the value and diminish the risk to all parties involved.”