By PYMNTS | September 27, 2023
Few technologies have sparked more interest and controversy in recent years than cryptocurrency. The worldwide market capitalization of the digital currency hit more than $1 trillion earlier this year. Cryptocurrency is renowned for its potential to create wealth and dramatic fluctuations in value, leading to skepticism in the investment world. Bitcoin, for example, once lost 30% of its value in a single day — but it has also seen comparable upward swings that have made it incredibly appealing for risk-seeking investors.
In 2021, federal regulators gave CUs the green light to partner with cryptocurrency providers, paving the way for their entry into this dynamic market. Financial institution (FI) customers are eager to start transacting, with 57% of cryptocurrency owners expressing interest in using their FIs for these transactions and 67% of CU members looking for more payment options.
The “Credit Union Tracker®” examines the prospects and hurdles CUs face when considering providing cryptocurrency services to their members.
Around the Credit Union Space
Cryptocurrency is a fast-changing space, and world governments are accelerating their efforts to regulate the industry. Canada recently announced a new change to its capital holdings laws to define four different types of cryptocurrency assets. The change aims to simplify FIs’ approach to various cryptocurrency risks. In doing so, regulators hope to prevent Canadian FIs from meeting the same fate as some firms in the U.S., including Silvergate and Signature Bank, which collapsed last year due to cryptocurrency liquidity issues. The new regulations, which just completed the public review phase, will take effect in 2025.
The Oklahoma-based WeStreet Credit Union recently became the first CU to partner with Etana Custody and CryptoFi to offer cryptocurrency trading to members. Etana plans to roll out cryptocurrency trading at several more credit unions soon, marking a significant expansion of this capability. Until now, cryptocurrency trading has been predominantly limited to banks and FinTechs.
For more on these and other stories, visit the Tracker’s News and Trends section.
How CUs Can Meet Members’ Cryptocurrency Expectations
Cryptocurrencies have become a popular choice for CU members seeking a novel, fast-moving and potentially lucrative investment opportunity. One recent study found that 26% of CU members hold some form of cryptocurrency. It stands to reason that CUs could benefit from catering to this member base, and many have already taken steps to provide cryptocurrency services.
This month’s PYMNTS Intelligence explores what members expect from their CUs when it comes to cryptocurrency and why CUs have added cryptocurrencies to portfolios.
About the Tracker
The “Credit Union Tracker®,” a collaboration with PSCU, examines the prospects and hurdles CUs face when considering to provide cryptocurrency services to members.
