Digital asset marketplace needs appropriate oversight

Credit unions support the “whole-of-government” approach to digital assets to ensure appropriate oversight and regulation of the marketplace, CUNA wrote to the Treasury’s Office of Strategic Policy, Terrorist Financing and Financial Crimes. That approach is outlined in an executive order issued by the White House in March.  

“The rapid developments of the digital assets system have far exceeded the pace of regulation,” the letter reads. “As a result, regulated financial institutions, like credit unions, have been held back from fully engaging in the digital asset marketplace due to a lack of clear authorization and guidance from their prudential regulators.”

“Companies that lack strict oversight and supervision, on the other hand, have been able to fill the void and establish themselves with consumers, “it adds.

Highlights include:

• CUNA strongly supports efforts to address digital asset related illicit finance and national security risks and agrees changes to the Anti Money Laundering/Countering the Financing of Terrorism (AML/CFT) regime are necessary.
• Creating and implementing a comprehensive regulatory framework for digital assets is the best way to ensure the effective deterrence, detection, and disruption of the misuse of digital assets.
• CUNA continued to have concerns about the creation of a Central Bank Digital Currency (CBDC), as the potential risks of a CBDC are not sufficiently mitigated to be outweighed by the potential benefits a CBDC could provide to consumers and the economy.