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NAFCU addresses stablecoin concerns ahead of SBC hearing
NAFCU’s Vice President of Legislative Affairs Brad Thaler wrote to the Senate Banking Committee yesterday to share thoughts on issues of importance for credit unions ahead of today’s hearing on stablecoins.
In the letter, Thaler commended the committee’s work in examining the integration of digital assets into traditional financial products - specifically, the rapidly growing market around cryptocurrency.
“Recent years have seen increased interest in cryptocurrencies, with prices reaching new highs time and time again. 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 wrote.
Thaler also highlighted concerns surrounding 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 (FDIC), and the NCUA.
In addition, Thaler addressed 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. NAFCU President and CEO Dan Berger also wrote to Treasury Secretary Janet Yellen last month pointing out 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.”
Read the full letter here. NAFCU will continue to keep credit unions updated on the latest news regarding this topic.