December 13, 2022

NAFCU reiterates need for crypto regs ahead of HFSC hearing

digital dollarThe House Financial Services Committee today is set to investigate what contributed to the collapse of FTX, a cryptocurrency company now in bankruptcy. Ahead of the hearing, NAFCU Vice President of Legislative Affairs Brad Thaler reiterated NAFCU’s call for a clear regulatory framework for cryptocurrency and other financial technologies.

“Recent developments in the digital asset and stablecoin space have proven both the enormous potential of these innovations and the need for regulation,” Thaler wrote, noting how distributed ledger technologies can enhance the financial systems ecosystem with operational efficiencies. However, without the proper regulatory framework to ensure the safety and soundness of these technologies within financial services, consumers and investors face significant risks.

“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 with new and emerging financial technology. As you do so, we urge you to ensure the needs of credit unions are considered in any legislative approach you undertake in the future,” Thaler concluded.

Last week, the Office of the Comptroller of the Currency (OCC) flagged crypto-assets in its semiannual risk report. The Fed in August released some guidance for banks engaging in crypto-asset-related activities and the CFPB last month published a Complaint Bulletin on the topic.

NAFCU has engaged with several agencies including the FedTreasury Department, and Commerce Department to share credit union feedback and concerns around digital asset regulation. The NCUA in May issued a Letter to Credit Unions providing NAFCU-sought clarity on the industry’s use of distributed ledger technology. The association will continue to work with lawmakers and regulators to ensure a level playing field and appropriate cybersecurity regulations within the financial services industry.

Today’s hearing is set to begin at 10 a.m. Eastern and will be available via livestream on the House Financial Services Committee’s website. The Senate Banking Committee will hold a similar hearing tomorrow.