The failure of numerous digital asset companies over the last year, has made crystal clear the need for a comprehensive regulatory framework to govern the digital assets system, CUNA wrote this week for the record of a House subcommittee hearing on regulatory gaps in digital assets, noting credit unions support appropriate oversight and regulation of the digital assets marketplace.

“Credit unions are concerned that digital assets expand some providers’ ability to offer products and services outside the scope of regulations, and the ease at which they can be used to facilitate criminal activity,” the letter reads “Whether from a fintech engaging in regulatory arbitrage or the avoidance of regulation through disintermediation of financial institutions enabled by cryptocurrencies and other digital assets, consumers receive less protection when bank-like services such as deposit taking, lending, and payments are obtained outside of the regulated banking system.”

CUNA noted its support for the White House’s “whole of government” approach to digital assets regulation, which contains policy objectives to protect consumers, businesses, and investors, as well as promote access to safe and affordable financial services.

“A digital assets framework must also bring nonbank fintechs engaging in equivalent activities under the purview of the Financial Crimes Enforcement Network (FinCEN) to ensure they are actively working to combat financial crime as well as the Consumer Financial Protection Bureau (CFPB) to ensure consumers are protected,” it adds.