New clarity in guidance for credit unions in the United States could bring digital assets straight to one's bank account. The National Credit Union Associated (NCUA) was quick to mention that partnerships with third-party providers are already acceptable, but the new guidance has brought clarity to the situation. These new services and partnerships could allow users to buy, sell, or hold uninsured digital assets in their bank accounts.
Crypto enthusiasts have long believed that digital assets would bring about the end of traditional banking, but these recent years have shown banks are willing to embrace cryptocurrencies. As regulations improve, the banking industry will look more into bringing digital currency services to its customers. These services could potentially lead to higher yield savings accounts and loan services with better rates.
Any true cryptocurrency maximalist will tell you that holding cryptocurrency in a bank account defeats most of the purpose of digital assets. While many believe that using Bitcoin or other digital currencies is much better than traditional currencies, the idea that the banking system would still have control over funds is concerning.
In the same way that giant centralized exchanges do many transactions ‘off-chain’, banks will opt to save transaction fees and will largely do the same. When transactions are in fact actioned off-chain, the transparency will be gone and there will likely be the ability to move and withdraw funds without permission.
Holding funds in a non-custodial wallet brings more privacy and security to cryptocurrency. Without private keys or hardware wallets, no one is authorized to move any digital assets. Centralized exchanges and banks are custodial wallets which means they hold the keys and can access an account at any time.
Crypto services being offered by credit unions in the US is still very good news for the industry. Many people who do not have the knowledge or ability to learn and understand blockchain can use these services to buy and hold cryptocurrency. Furthermore, the addition of crypto services could potentially push banks to upgrade their own services and offer high-yield accounts.
Finally, the implementation of digital assets in bank accounts could allow employers to begin paying their team members in crypto.
Would you hold your cryptocurrencies in a bank account? Would you want your paycheck to come in cryptocurrency? Let us know!
