LAS VEGAS–Just how robust the interest, concern, worry and excitement is among credit unions when it comes to cryptocurrencies and blockchain can be seen among CUs meeting at two different events this week, with both audiences separately being told that whether they’re aware of it or not, many of their members are way ahead of them when it comes to the digital investments.
At both the PSCU Member Forum in Las Vegas and the NACUSO Network meeting 2,300 miles away in Orlando, multiple sessions and discussions focused on crypto, with everyone from newbies to crypto veterans (relatively speaking) to vendors to regulators all weighing in.
In Las Vegas, an executive with PSCU said, “Your members are in this space already and so are you.” In Orlando, one fintech CUSO exec warned, “I hear credit unions say, ‘My members aren’t asking for it.’ They aren’t going to ask you. You are going to see it in their behavior.” At both meetings, experts said a review of monthly card data will show crypto activity among members of nearly all credit unions.
As CUToday.info reported, at the NACUSO meeting both NCUA Board Member Rodney Hood and NCUA Vice Chairman Kyle Hauptman in separate remarks spoke to the imperative for credit unions to innovate and why they believe NCUA must not get in the way.
New Microsite
During its meeting, PSCU announced the creation of a new cryptocurrency microsite. Targeted and specifically "curated" for credit unions, the site will serve as a continuously updated hub for information and educational resources on all things related to digital assets, according to PSCU.
For credit unions meeting at the Bellagio Hotel for PSCU’s Member Forum, CU execs expressed interest in learning more about crypto, raised concerns what a crash in the volatile price of crypto might mean, and fretted over fraud, among other concerns.
As CUToday.info has extensively reported, most recently here, a number of credit unions are now offering cryptocurrency services to their memberships, with some contemplating using members’ crypto holdings as collateral for loans.
In Las Vegas, Scott Henning, CMO at Novation CU in St. Paul, Minn., told CUToday.info he knows “just enough about cryptocurrency to be dangerous.”
“We’re interested, but we need more education on the topic,” he said.
Henning said his credit union is somewhat wary over how inflation could bring even greater volatility to cryptocurrencies, especially given the “crashing” value of some cryptocurrencies recently.
Brian Scott
Enrolling in 3D Secure
Deere Employees CU in Moline, Ill., echoed Novation CU’s interest in becoming more educated, with one exec unsure if DECU will become active in the crypto space.
“Our credit union does not see crypto as something we're necessarily involved in, but our stance is we want to make sure that our members are able to purchase it through whatever way they want to obtain crypto. We want to do our best to make sure that our cards will always work for them as part of that process,” said Jennifer Wenckowski, AVP card services and digital payments at Deere Employees.
Wenckowski said Deere has enrolled in 3D Secure, which is a protocol designed to be an additional security layer for online credit and debit card transactions.
“That is a big move for crypto purchasing, because a lot of the crypto platforms use 3D Secure,” she explained. “It really helped our members get past the fraud blocks that they were receiving when they were trying to purchase crypto on their cards. As an institution we don't have anything on a roadmap to actually offer as a way for members to purchase crypto, or for us to play in that space, we just want to make sure that our members can do it with their cards.”
Crypto-related fraud is a concern of Neighbors CU in St. Louis.
“There's not a lot of regulation here… I just have concerns, from a fraud perspective,” said Kathleen Krause AVP of card services at Neighbors. “We've already had members call in and say they have fraud and it's cryptocurrency. And there's no going back once they do it. I'm just hoping to learn more about it, and the strategies to help members avoid fraud.”
New Resource
Brian Scott, chief growth officer at PSCU, told CUToday.info that educating credit unions on cryptocurrency is the focus of the CUSO’s new website, pscu.com/crypto.
“We knew we needed to launch a cryptocurrency resource, and we now have a couple people on the team who are crypto experts—this is all they do every day,” Scott said. “They're providing daily new information, adding to blogs, sharing relevant information to credit unions so they can be in this space.”
Scott said PSCU regularly hears from its members, asking questions about how can they support members with crypto when NCUA says they can’t actually hold the assets on their books.
That issue was similarly addressed during the NACUSO meeting.
“But our credit unions want to know more. They want to know how they can be supporting their members getting involved with cryptocurrency,” Scott said. “We will be putting new information on our microsite every day to help credit unions learn more about cryptocurrency, feel better about the digital payment form, and help them move forward in this space if they choose to do that.”
A Tenth of Card Volume
Scott added that if credit unions don’t think their members are already getting involved in crypto, they are mistaken. He pointed to PSCU payments data, showing 8%-10% of card activity at the CUSO’s credit unions is related to crypto purchases.
“So, your members are in this space already and so are you,” Scott noted.
“There is no doubt cryptocurrency is a hot topic in today’s financial landscape, with many credit union members already active and others curious to learn more about it,” said Scott Young, vice president of innovation and design at PSCU. “Due to a lack of regulatory guidance until now, credit unions have held back from any involvement with cryptocurrency, the landscape is rapidly changing—making it the optimal time for credit unions to educate themselves. We are hopeful that credit unions can use this new resource to educate their staff and their members, evaluate associated risks and make informed decisions surrounding participation in this rapidly evolving payments technology.”
What Microsite Offers
PSCU said its microsite will feature videos—including a downloadable educational video to share with credit union boards and staff—along with blogs, white papers and more from PSCU and other industry thought leaders. The site will also link to relevant updates and industry resources from groups like the NCUA, among others.