Late last month, the Filene Research Institute published a report on “The Path Forward for Crypto: What Credit Unions Need to Know“.
Cryptocurrencies offer innovative possibilities but also pose many risks.
Credit unions are anticipating greater clarity on crypto regulation while actively seeking opportunities for enhanced staff and leadership training, issuing new financial products, and establishing fintech partnerships in the fast moving landscape of today.
Cryptocurrencies and blockchain technology (“crypto”) have proven more resilient than expected over the past decade and industry leaders are now exploring the opportunities they present for credit unions and their consumers. However, according to credit union leaders, lack of regulatory clarity and support is the greatest roadblock to offering crypto products to members. Additionally, credit unions require specialized knowledge and training to select the most appropriate crypto products and partners to meet the needs of their membership.
Despite encouraging signs and perceived need to offer crypto products, risks are still present. Even with these risks and challenges, credit unions cannot ignore the strong consumer demand for crypto products especially from Millennial and Gen Z members. In order for credit unions to build momentum in the crypto industry, fintech partnerships will be essential given the lack of expertise in these early stages.
CREDIT UNION IMPLICATIONS
In recent years, credit unions have begun exploring how to offer cryptocurrencies and crypto-based financial products to their members. While some credit unions expressed interest in offering their own custodial wallets, lending or investment products, and digital identities for account opening, most seemed to accept partnership as a low-risk, low-investment way to be an industry fast follower.
Crypto has the potential to create innovative products that attract and retain members and reduce back-office inefficiencies. However, despite encouraging signs and a perceived need to offer crypto products, risks still abound. Download this preliminary report for recommendations on how to move forward with crypto.