By Ray Birch
TULSA, Okla.—Looking to offer cryptocurrency services to its members, one credit union has developed its own, unique crypto platform by partnering with several vendors.
WeStreet Credit Union has introduced a new “crypto portal” for users to buy, sell and hold their digital currency.
The move is unique in that $960-million WeStreet’s offering does not partner with the two major cryptocurrency players that have been working with credit unions—NYDIG and Bank Social. NYDIG, as CUToday.info reported late last year, has since backed out of serving the credit union space.
WeStreet’s offering is also unique in how it is being presented--as a portal and a simple way to work with crypto through a mobile app or online. The service, too, is a blend between non-custodial and custodial crypto wallets, the CU said.
With a custodial crypto wallet the private keys are held by a third party. With a non-custodial wallet, individuals own their own crypto and keys.
Learning From Member Behavior
President/CEO Greg Gallant told CUToday.info WeStreet knew it had to get into the crypto services business based on its members’ activities.
“Our members are certainly interested in crypto. All we had to do was look at the electronic transactions hitting their accounts, and it was very plain to see. Quite a few members were already buying crypto,” Gallant said. “We followed up with certain members and that came back very positive. There was a large percentage of the membership that we had surveyed that were either buying crypto or were crypto curious.”
Greg Gallant
“We saw an opportunity for the credit union to bring a little more structure, a little more education to our members by developing something that would help them,” he continued.
Started Two Years Ago
WeStreet began developing its crypto effort more than two years ago, moving forward in earnest after NCUA first issued some cryptocurrency guidance. But the CU did not choose to partner with NYDIG or Bank Social, for several reasons Gallant said.
“First, NYDIG only offered one coin—Bitcoin. That was a little limiting,” said Gallant, who noted WeStreet’s service supports Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Stellar, Avalanche and Chainlink. “We were also looking for a solution that would integrate into our online and mobile banking, and that just really didn't exist at the time. We found vendors to partner with, and now the service is embedded in our online and mobile platforms.”
Gallant said another reason for taking its own path was to make working with cryptocurrency “less complicated” for members. He acknowledged the problems of custodial wallets, where buyers don’t really own their crypto because they don’t own their crypto keys—which has led to losses for some when crypto platforms such as FTX folded. But the credit unionalso didn’t like the fact that with non-custodial wallets, where individuals hold their own keys, they can lose them and then their crypto.
“That is too complicated and risky,” Gallant said. “In the event someone loses that key, then that crypto is gone forever.”
Gallant added the CU made its decision not to partner with NYDIG well in advance of the platform’s decision not to work with credit unions, and the layoffs it announced. He said WeStreet had no concerns about NYDIG.
Partners With CryptoFi and NCR Digital
WeStreet Chief Digital Officer Eric Hilaire said WeStreet partnered with NCR’s Digital Insight group, crypto management platform CryptoFi and trust company Etana to build its solution.
“We put CryptoFi and Digital Insight together and we worked with them to develop an interface into our mobile and online platform,” Hilaire explained. “Also, we partnered with a trust company based in Colorado, which custodies all the coins for our members.”
Hilaire emphasized working with Etana removes concerns about losing crypto keys. Moreover, members do own their own crypto and can control it by working with Etana.
“We offer a custodial model that is not dependent on the member having to hold the crypto keys,” Hilaire said. “And when they log in to their wallet through our portal, mobile and online, they're seeing their balance. When someone logs into the credit union's mobile app and hits the menu option, they can go to ‘crypto.’ It will illustrate what coins we have available. They can buy the coins within the app. It is settled in their credit union account—savings, checking, whatever type of account they choose.
“When members sell their crypto, they are selling it in the market through the same app, and the settlement comes back to their account immediately. It's a closed-loop ecosystem,” he added.
A Regulated Provider
Hilaire pointed out Etana is just holding the crypto as the custodian.
“Etana is a regulated company and they're holding the crypto in cold storage,” Hilaire said. “So, there's extra security. It's offline, per se. And, CryptoFi runs eight random checks per day just to make sure the crypto is still there. This ensures that Etana is not using the coins to fund other endeavors. That was very important to us because that's where the FTX-like issues arose. We want to protect our members from those types of activities.”
Labeled to the Credit Union
Gallant added WeStreet wanted to present a solution that the CU could label as its own and integrate into its digital product offerings.
“We didn't want to have this live outside of our digital or online banking offerings. We also feel this cuts down on fraud opportunities,” Gallant said.