The development of a comprehensive national standard regulating digital assets will level the playing field and protect consumers, CUNA wrote to a joint House Financial Services and House Agriculture subcommittee hearing. The hearing addressed regulatory gaps in digital assets markets.
“Regulation of the crypto industry must be commensurate with the innovation and development occurring, or the systemic design and operational failures will persist and infect the larger economic ecosystem,” the letter reads. “Regulated financial institutions, like credit unions, must have the required authorities to fully engage in the cryptocurrency marketplace—starting with the ability to custody crypto-assets.
“Credit union members trust their credit union to provide necessary financial services, and the ability to provide new financial services products and delivery channels is needed for credit unions to fulfill their mission. Innovation cannot be effective if it leaves a significant portion of the market behind,” it adds.
CUNA also notes credit unions are concerned that digital assets expand some providers’ ability to offer products and services outside the scope of regulations and view of law enforcement.
“Tasked with safeguarding consumers’ money, credit unions and banks are generally regarded to be the most regulated part of the financial system,” the letter reads. “Because this regulation comes with a cost, entities looking to provide bank like services without regulation can leverage technology to drive down cost and speed up innovation without considering risk or the negative impact of their actions. Crypto service providers have taken full advantage of this regulatory work-around.
The comprehensive regulatory framework but ensure digital assets companies are subject to regulations, examinations, and oversight commensurate with the services they provide.