Credit unions are getting into the crypto game

Three months have passed since Torrance-based Unify Federal Credit Union became the first credit union in the United States to begin offering its members the ability to trade bitcoin.

In November, Unify, which holds $3.6 billion in assets, partnered with New York-based bitcoin trading platform NYDIG to provide its 286,000 members with access to cryptocurrency. At the time, it seemed like the best time for Unify to enter the crypto fray: Bitcoin was traded at all-time highs exceeding $60,000 and had a market capitalization of over $1 trillion.

But no sooner had Unify unveiled the new crypto offering than Bitcoin began a precipitous decline in value, dropping to nearly $35,000 at its lowest point in January. (The token is now trading at around $40,000.) Still, that doesn’t seem to have fazed Unify members’ appetite for getting into the crypto game; After peaking at Unify’s initial Bitcoin trading waitlist of 2,500, over 6,000 credit union members are now using Unify’s crypto trading services.

Photo courtesy of Unify

Activity on the platform has slowly increased to around 5,500 transactions per month, with over $600,000 in Bitcoin transactions to date. With Unify charging a maximum of 2% on every transaction, regardless of size, this is a whole new source of non-interest revenue for the credit union.

“Two months doesn’t necessarily make a trend, but it certainly seems like our members are very interested in using their primary financial institution as a vehicle to explore crypto,” said Greg Glawson, executive vice president and chief information officer of ‘Unify. .THE.

Glawson notes that, if anything, the Bitcoin selloff has only increased interest from members looking to “buy the dip.”

“What is interesting is that in the beginning, when Bitcoin was [trading] very high, there were fewer transactions for higher dollar amounts,” he said. “But now there are more transactions at lower amounts.”

Other credit unions are looking to follow the path blazed by Unify. Idaho Central Credit Union, its state’s largest credit union, also teams up with NYDIG on Bitcoin trading services that launched earlier this month as more financial institutions nationwide gather on the sidelines, according to the spokeswoman for the Credit Union National Association (CUNA ), Lauren Williams.

The volatile world of crypto trading seems like unusual territory for credit unions. As not-for-profit, member-owned financial institutions, they have long had a reputation for being more stable, conservative and reliable than commercial banks. But as more credit unions move into the space, it’s a sign of both the growing acceptance of crypto and the credit union industry’s search for new opportunities. revenue growth.

Glawson said Unify’s venture into crypto is all about “bringing[ing] the best offers to our members” in the context of growing public interest in digital assets. He added that the credit union made sure its members knew what they were getting into.

“We want to make sure member education is front and center when entering the cryptocurrency space,” he said. “We want to make sure our members are aware of what cryptocurrency is, what it isn’t and certainly there is volatility in the region.”

The credit union industry as a whole, meanwhile, argued that its shift to digital assets would provide consumers with more protections at a time when federal regulators are increasingly eyeing the crypto industry.

“Our concern is that cryptocurrency and blockchain-based financial platforms are creating an unregulated financial sector that could have major repercussions for the U.S. economy,” CUNA, which represents more than 5,000 credit unions at the national scale, written in a November letter to the Joint Economic Committee of Congress. He added that “Congress should be looking at ways to allow credit unions and other financial institutions to provide services related to digital assets, so that those services can be properly overseen by regulators.”

Meanwhile, the National Credit Union Administration, the federal regulator that oversees the industry, is “currently reviewing issues related to the benefits, risks, and regulatory treatment of decentralized financial products and cryptocurrencies,” according to the NCUA spokesman Joseph Adamoli.

“While the NCUA recognizes the potential opportunities presented by these products and technologies, we also recognize the potential risks they present to credit union members, the credit union system, and the broader financial services industry” , Adamoli said in an email to dot.LA.

In the meantime, Unify and a handful of other credit unions are moving forward with their plans. Unify is now planning to expand its crypto trading platform beyond Bitcoin; in addition, it is evaluating the possibility of paying out member dividends in bitcoin, offering credit card rewards in crypto, and allowing members to borrow against their crypto holdings.

“It comes down to leadership at Unify recognizing that cryptocurrency is here to stay and a market force,” Glawson said. “We know this is something our members are very interested in.

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