Bitcoin remains a divisive topic. Its proponents herald it as the future of money and finance while detractors smell a worthless scam. Both camps have had opportunities to crow over the past year.

Between these poles, however, dozens of established firms and countless startups continue to invest billions of dollars to explore and refine use cases for cryptocurrency and its underlying technology. Meanwhile, consumers have endured dramatic price swings while adopting digital assets in growing numbers.

According to President Joe Biden’s executive order on the responsible development of digital assets, one in six Americans have owned or engaged with cryptocurrency in some fashion—a conservative estimate. Multiple studies further indicate a broad majority of Americans would prefer to manage these activities through their financial institution.

In December 2021, NCUA reiterated its position that federally insured credit unions have existing authority to partner with third parties to enable members to buy, sell, and hold uninsured digital assets. This “clarifying letter” seemed to resolve a bottleneck constraining several in-flight initiatives. 

In mid-January, $3.5 billion asset UNIFY Financial Credit Union in Allen, Texas, partnered with NYDIG to launch buy/sell/hold bitcoin capabilities. Visions Federal Credit Union in Endicott, N.Y., followed suit later that month. As of July 31, at least 10 credit unions had entered the market with similar offerings.

Conversations with leaders in the space reveal several common themes: They remain undeterred by recent market volatility, have experienced consistent member behavior, and are motivated by opportunities for technology learning and member relevance rather than near-term revenue potential.

Meeting demand 

Another common thread across these early movers is recognition that members are already engaged in cryptocurrency. In announcing the June launch of its service, $3.6 billion asset Stanford Federal Credit Union in Palo Alto, Calif., noted it had documented 26,000 transactions to and from crypto exchanges by its members during 2021.

Outflows to these exchanges by Visions Federal members slowed following the January introduction of its service, although Cynthia Schroeder, senior vice president of digital assets at the $5.3 billion asset credit union, is reluctant to read too much into the correlation as bitcoin’s price decline may have also contributed to the lower volumes.

Along with fellow leaders UNIFY Financial and $7.3 billion asset Idaho Central Credit Union in Pocatello, Visions Federal had essentially completed its implementation by last October but deferred a full rollout until January 2022. 

In the interim, NCUA issued a letter clarifying that federally insured credit unions had existing authority to “establish relationships with third-party providers that offer digital asset services… allowing members to buy, sell, and hold uninsured digital assets with the third-party provider.”

Although no new authority was delineated, this added comfort seemed to facilitate a wave of early 2022 launches. And although a few community banks have entered the market as well, credit unions are setting the pace—perhaps because statements from the Office of the Comptroller of the Currency and FDIC have been more equivocal.

NEXT: Avenues for engagement