Cryptocurrency and digital assets and platforms created through blockchain technology are poised to create major disruptions in the delivery of financial services, CUNA wrote to the Senate Banking, Housing, and Urban Affairs Committee Tuesday. The committee conducted a hearing on the report from the President’s Working Group on Financial Markets’ Report on Stablecoins.
“We have significant concern with the potential for regulatory arbitrage and consumer harm if these technologies and platforms are not subject to substantial regulation,” the letter reads. “As you know, credit unions are subject to significant consumer protection and safety and soundness regulation. However, the crypto and digital currency sectors operate largely outside of the traditional financial safeguards and generally without the stabilization and protections that financial intermediaries generally provide,”
CUNA notes that the elimination of a financial intermediary is a fundamental innovation of cryptocurrency, but this also leads to risks, and said Congress should explore ways to regulate the delivery of digital currencies.
Furthermore, Congress should look for ways enable credit unions and other financial institutions to provide digital asset related services, so that these services can be properly overseen by Federal regulators,” it adds.