CUs’ Sitting on Valuable Crypto Asset — the Ability to Educate

Cryptocurrencies’ popularity has soared since their introduction in 2008, achieving record growth last year. PYMNTS’ research shows that the share of consumers who held crypto rose from 16% in 2020 to 23% in 2021, and this percentage is even higher among credit union members. A recent report from the Credit Union National Association (CUNA) found that 39% of CU members owned cryptocurrencies, compared with just 17% of nonmembers. CU members are also seeking more innovation from their financial institutions (FIs), with nearly one-quarter of CU members saying they would take their business to another FI to obtain the innovative products and services they demand.

Credit unions have been rightly cautious in proceeding with innovations in the crypto space. Market volatility, the lack of a regulatory framework and the absence of liability protections are a few reasons holding back the widespread adoption of crypto in financial services. Still, with 91% of members looking to their CUs for financial advice and guidance, credit unions have an opportunity to help members diversify their portfolios while educating them on the responsible use of cryptocurrencies.

This edition of the "Credit Union Tracker®," a PYMNTS and PSCU collaboration, takes a closer look at some of the emerging trends in the crypto landscape as well as some of the major barriers hindering its use in financial services. 

Around the Credit Union Space

An economist from CUNA is warning that credit unions need to better advise members on the risks of investing in cryptocurrencies and using digital currencies for financial transactions. Recent CUNA data shows that CU members are more likely to own cryptocurrencies than the general population, and senior economist Ligia Vado cautioned that the lack of regulatory oversight for digital currencies places users at higher risk due to potential fraud and misconduct. A recent CUNA survey found that 39% of credit union members owned cryptocurrencies versus 17% of nonmembers.

Credit unions seeking to maintain relationships with the 131 million members who use them must meet their expectations for both personalized services and immediacy, according to a recent report. Some 80% of respondents to a survey indicated that they want an FI that knows their financial needs on a personal level. At the same time, the report said there is a notable opportunity for CUs to enable immediate, online self-service options for members to attend to all their financial needs, such as opening accounts or activating new cards. In addition, connected experiences that use available member data for personalization across multiple channels can help optimize member retention and satisfaction, the report said.

For more on these and other stories, visit the Tracker’s News and Trends section.

Visions Federal Credit Union on Building Crypto Literacy

Credit unions are in a unique position to help consumers as they enter the world of cryptocurrency and digital assets, according to professionals at Endwell, New York-based Visions Federal Credit Union. Joe Keller, vice president of digital assets, and Cynthia Schroeder, senior vice president of digital assets, are working to make cryptocurrencies and digital assets more consumer friendly. The CU’s commitment to the role of educator does not stop at ensuring that staff and members can use these tools, however: VFCU also works to build industry awareness and topical literacy on crypto.

To learn more about VFCU’s and CUs’ role in promoting crypto literacy, read the Tracker's Feature Story.

PYMNTS Intelligence: How Credit Unions Can Meet Member Needs With Cryptocurrency Services

CUs find themselves having to decide how and when to offer services in a currency still very much in its infancy. Some 16% of CUs are planning to offer cryptocurrency investing or trading in 2023 or later, according to one report and 11% anticipate offering cryptocurrency rewards during this time. Current offerings, however, are at a much lower level, with just 4% reporting plans to implement cryptocurrencies in 2022. Meanwhile, one-third of CUs said they have no plans to offer blockchain solutions. With so much member interest, one might wonder why more CUs are not rushing to offer cryptocurrency services, but valid concerns remain.

To learn more about CUs’ role in enabling their consumers to navigate cryptocurrency’s risks and opportunities, read the Tracker’s PYMNTS Intelligence.

About the Tracker

The "Credit Union Tracker®," a collaboration between PYMNTS and PSCU, explores the latest news and developments in the credit union space.