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NCUA issues NAFCU-sought clarity on credit unions’ use of distributed ledger technologies
The NCUA on Wednesday heeded NAFCU’s call and issued a Letter to Credit Unions regarding credit union use of distributed ledger technologies (DLT) in connection with permissible credit union activities.
“There is without a doubt a need for additional guidance from regulators on how credit unions can better adopt digital assets and emerging financial technologies. We recognize and thank the NCUA for reducing regulatory uncertainties around digital assets," said NAFCU Senior Vice President of Government Affairs Greg Mesack. "We appreciate that the NCUA heeded our call to adopt a form-agnostic approach to assessing how credit unions use digital assets and related technologies. We will continue to articulate the credit union industry’s perspective on this topic and encourage the NCUA to continue building a sound digital assets regulatory framework.”
The Letter to Credit Unions reiterates the importance of sound governance and planning related to deploying new technologies like DLT and states that the NCUA recognizes that cases for implementation may expand rapidly as the technology becomes more widespread and credit unions become more familiar with it. Because of this familiarity, the NCUA provides areas for credit unions to consider when evaluating whether to use DLT through the Letter to Credit Unions.
The NCUA provides guidance on several topics related to credit unions utilizing DLT, including governance, oversight, and planning, as well as risk and risk-mitigation strategies.
NAFCU urged the agency to offer guidance for credit unions regarding digital asset adoption. The association will remain engaged with the NCUA to ensure credit union voices are heard on this topic.