Cryptocurrency Investment Expansion Planned for Local Credit Unions?
In a significant move, credit unions across the United States are venturing into the world of cryptocurrencies, offering their members a new avenue for investment. This shift is largely due to the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), which has provided a framework for stablecoins.
One of the key players in this digital revolution is InvestiFi, a technology partner that helps credit unions manage crypto services. In 2023, InvestiFi partnered with WeStreet Credit Union and Frankenmuth Credit Union to offer crypto investing services to their members. The partnership has since expanded, with Florida's Ocala Community Credit Union, Nevada's Clark County Credit Union, and Oklahoma's Citizens Bank of Edmond joining the fold.
Cryptocurrencies offer opportunities for diversification, more efficient transactions, and greater financial flexibility. However, it's important to note that the volatility of cryptocurrencies can be extreme, with prices making dramatic moves in minutes. The bid and ask price on a crypto transaction is referred to as "the spread". Cryptocurrency transactions made through credit unions usually have competitive fees.
Investors should evaluate their financial goals and tolerance for risk when investing in cryptocurrencies. It's usually a good idea for investors to talk with a financial adviser when venturing into this space. The deposit insurance that protects money at a bank does not apply to digital assets when investing in crypto through a credit union.
Custodial partners, such as regulated trust companies, carry a certain amount of private insurance, more than what is offered on most other crypto exchanges or wallets. InvestiFi thoroughly vets its crypto custodial partners to ensure the highest levels of security and risk management.
Crypto stocks such as Coinbase Global (COIN), Bullish (BLSH), and Circle Internet (CRCL) have shown impressive price action. Earlier this year, Bitcoin went above $124,000, an all-time high.
The National Credit Union Administration has made it easier for credit unions to provide crypto services through partnerships with licensed service providers like InvestiFi. Felix Shipkevich, special professor of law at Hofstra Law, stated that these relationships allow credit unions to facilitate crypto investing without directly managing or holding the digital assets.
Consumers have access to mobile apps, a wide variety of cryptocurrencies, and high levels of security and risk management through these services. Cryptocurrencies can be traded or transferred 24/7, often at a fraction of the cost of traditional methods.
Credit unions are using technology partners like InvestiFi to manage crypto services, including the buying and selling of digital assets. By offering crypto services, credit unions aim to prevent members from transferring their money to third-party crypto platforms for investing purposes. This move not only expands the investment options for credit union members but also strengthens the relationship between the members and their credit unions.
In conclusion, the integration of cryptocurrencies into credit union services represents a significant step forward in the mainstream adoption of digital assets. As more credit unions partner with technology providers like InvestiFi, we can expect to see more members taking advantage of the opportunities that cryptocurrencies offer. However, it's crucial for investors to approach these investments with a clear understanding of the risks and benefits involved.
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