Federal Credit Union Regulator Should Look at Crypto Rules, Official Says

The National Credit Union Administration (NCUA) could be the next federal regulator to dip its feet into crypto-related rules.

Credit unions will want to look at digital assets and blockchain technology, said NCUA Vice Chairman Kyle Hauptman in a speech Wednesday. Speaking to the Credit Union National Association Governmental Affairs Conference, Hauptman said his regulatory agency may consider providing guidance around the treatment of digital assets.

Credit unions are nonprofit, member-owned financial institutions that provide similar services to banks in the U.S. While national banks are regulated by the Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC), credit unions are overseen by the NCUA. 

“NCUA may want to look at the actions taken by another regulator, the OCC. That agency recently provided guidance around custody of digital assets and the use of stablecoins for payments,” Hauptman said during his speech. “Stablecoins, as you may know, are cryptocurrencies designed to minimize price volatility, and the OCC’s guidance moves the U.S. closer to the real-time payment systems already used in other countries.”

The NCUA may not want to recreate every piece of guidance the OCC published, but Hauptman said he looks forward to working with NCUA Chairman Tood Harper to see what can help credit unions innovate. 

Hauptman told CoinDesk prior to his speech that the NCUA is the federal regulator and insurer for the more than 5,000 credit unions in the U.S., which collectively hold some $1.5 trillion in deposits. 

"At some point, we’ll speak with NCUA staff about doing a side-by-side with what the OCC did and see what we do or don’t want to adapt for credit unions. NCUA benefits a bit from ‘somebody else went first,’ so we can, where appropriate, build on the OCC’s experience,” he told CoinDesk. 

He pointed to ATMs and remote deposits as examples of past innovative tools that credit unions implemented. 

He likened decentralized finance (DeFi) and stablecoins to the introduction of smart phones and mobile banking. 

“Smart phones didn’t exist 20 years ago and thus there weren’t regulations around mobile banking,” he said. “Policymakers then, obviously, had to provide clarity or risk seeing regulated institutions slowly lose business to new technologies.”