WASHINGTON—NAFCU wrote to the Senate Banking Committee ahead of a hearing on stablecoins saying credit union and others need “rules of the road.”
“Recent years have seen increased interest in cryptocurrencies, with prices reaching new highs time and time again,” said Vice President of Legislative Affairs Brad Thaler. “With so much capital flowing into crypto, credit unions need to keep up to maintain relevancy to the interests and needs of the evolving customer base. In order to ensure the long-term viability of the credit union system and the Share Insurance Fund, credit unions need rules of the road and cryptocurrencies need to be subject to proper oversight.”
Thaler also expressed concerns related to the lack of regulatory oversight and rule guidance facing credit unions as they seek map out adaptation of digital assets.
“Distributed ledger technology (DLT) and other technologies related to digital assets present an increasing array of potential operational efficiencies,” continued Thaler. “While these technologies are exciting and may provide operational advantages, some regulators have been behind the pace of innovation in providing rules and guidance and adopted a disjointed approach.”
Thaler explained how some regulators are now beginning to embrace some of the technologies, including the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation, and the NCUA.
Other Concerns Raised
In addition, Thaler also raised concerns regarding the President’s Working Group of Financial Markets’ (PWG) recent report recommending that Congress enact legislation requiring all payment stablecoin issuers to be insured depository institutions - excluding credit unions.
The trade group noted that its president and CEO, Dan Berger, wrote to Treasury Secretary Janet Yellen in November over what NAFCU said are the risks of excluding credit unions from the legislation requiring all payment stablecoin issuers to be insured depository institutions.
“This piecemeal approach, if left unchecked, will result in competitive disadvantages, market distortions, and reduced innovation,” concluded Thaler. “We urge Congress to explore ways to provide regulatory certainty and parity across the financial services system and ensure a level playing field for all.”