Regulators love to talk about ‘protecting’ credit unions, but what happens when their outdated, slow-moving policies are the very thing putting these institutions (and their members) at risk? Right now, both state and national credit union regulators are watching the financial world evolve from the sidelines, content to ‘play it safe’ and let credit unions become obsolete rather than adapt to the realities of the era of modern money.
Meanwhile, the rest of the financial sector is quickly moving in to stake their claim on the inevitable digital future. Big banks are securing Bitcoin custody rights, states are adding Bitcoin to their treasuries, and federal agencies are drafting policies that acknowledge digital assets as a legitimate part of the financial ecosystem. And credit unions? They’re like teenagers waiting for permission to use the family car while the big banks and fintechs are already out joyriding with their friends in the financial fast lane.
The question isn’t whether digital assets are here to stay—it’s whether credit unions will be allowed to offer the services their members are demanding or be forced to watch them leave for more innovative institutions. Regulatory uncertainty, ambiguity, and delay could put the entire movement of community cooperatives at risk.
Seven recent developments everyone in finance needs to be aware of
1. Trump’s executive order on bitcoin & digital assets
Love him or hate him, Trump’s executive order on Bitcoin and digital assets was a big deal. It explicitly acknowledges the role of digital assets in economic innovation and promotes the responsible growth of blockchain technology across all sectors. Even more interestingly, it affirms the right of individuals and private entities to transact on open blockchain networks without interference—meaning, yes, people get to control their own money (What a concept!).
2. Federal Reserve Chairman Jerome Powell’s statement
Enter Jerome Powell, who, when not busy keeping interest rates stagnant, made it perfectly clear that banks can and should be able to custody Bitcoin and crypto—provided they know how to manage the risks. Translation: Regulators, stop acting like digital assets are somehow different from ‘money’; they’re just another financial instrument that younger generations are turning to for the preservation of their wealth.
3. SEC’s withdrawal of SAB-121
Then there’s the SEC’s move to scrap SAB-121, finally giving banks the go-ahead to offer Bitcoin custody services without creating artificial, redundant liabilities on their balance sheets. In plain terms? The same institutions that have been storing your money for decades can now hold Bitcoin too—which makes perfect sense, unless you’re a regulator stuck in technological advancements from last century.
4. FASB’s fair value accounting rule change
For years, Bitcoin was stuck in accounting purgatory, treated like a declining asset under old impairment rules. Now, thanks to FASB’s new fair value accounting guidelines, Bitcoin and digital assets can be properly accounted for at fair market value—making them a much more attractive asset for institutional balance sheets. It took awhile, but it’s sure nice of the conglomeration of accountants over at the FASB to give us all the green light on valuing digital assets just like we would any other assets.
5. State-level bitcoin Treasury initiatives
Meanwhile, Fifteen (so far) U.S. states are moving forward on recognizing Bitcoin as a legitimate reserve asset. Arizona, Texas, Pennsylvania, and Wyoming (among others) are pushing legislation to incorporate Bitcoin into state financial reserves—which raises the question: when these states start accepting tax payment in Bitcoin, or form strategic reserves, how do they intend to custody these assets? Will states put their treasuries at risk in big centralized exchanges, or allow local, community bank and credit unions to responsibly safeguard these assets?
6. Formation of the US Senate Panel on Digital Assets
Developments at the federal level include the formation of a new digital assets panel by the U.S. Senate Banking Committee, led by Bitcoin advocate Senator Cynthia Lummis. Her message? If the U.S. wants to stay relevant in financial innovation, it’s time for Congress to get serious about a legal framework. Seems reasonable, right?
7. Bitcoin Act of 2024
In a similar vein, we have the Bitcoin Act of 2024, a bill proposing a Strategic Bitcoin Reserve for the U.S. Government. Think of it as Washington finally realizing that Bitcoin isn’t just some internet novelty—it’s an actual financial instrument with global strategic importance. President Trump has supported this initiative which all but guarantees the United States will set into motion an international race to acquire as much of the remaining Bitcoin supply as possible. Buckle up.
The real risk to credit unions and their members: Regulatory hesitation
While banks, fintechs, and even state governments are embracing reality, credit union regulators continue to sit in indecision, leaving credit unions in regulatory limbo. This failure to define policies isn’t just inconvenient—it’s a major liability to long-term, local, democratic access to capital. If credit unions aren’t allowed to offer responsible custody solutions, their members will continue to take their money elsewhere.
If history has taught us anything, it’s that regulators hesitate on even the most sensible of innovations:
- Internet banking? Initially met with regulatory resistance, now unimaginable to live without.
- Mobile payments? Once dismissed as unnecessary, now an integral part of the economy.
- Fintech disruption? Traditional institutions that ignored it became obsolete overnight.
Let’s not let history continue to repeat itself—it’s time for state and national regulators to provide clear, actionable guidance to the thousands of community financial institutions who are waiting.
Credit unions must lead, not follow
- Credit unions are supposed to serve their members. That means offering financial services that meet modern expectations and protecting money in all its forms.
- Regulatory uncertainty isn’t an excuse for inaction. Credit union leaders should be pushing for clear policies, not waiting for permission.
- Advocate, don’t wait. The institutions that take the lead now will be first movers in a new financial era.
Like it or not, the financial world is embracing digital assets at a pace which is accelerating daily. The question is no longer whether Bitcoin and digital asset custody will happen—it’s whether credit unions will be allowed to participate or be sidelined by outdated regulations. The choice is simple: lead, or get left behind.
