The U.S Credit Union Regulators are worried and demand detailed plans of how their firms will handle DeFi. The NCUA in an open letter asked the firms to provide solid arguments on how they are communicating with DeFi and DLT, and what is likely to be an outcome of these talks.
The request for information was put forward by the U.S Credit Union Regulators on Thursday, after three of the executive members shown their concerns and agreed upon moving a request. They asked for detailed information about distributed ledger technology (DLT) and decentralized finance (DeFi). In their request, all three of them voiced that DLT and DeFi might have an impact on NCUA operations. So, it is the right of NCUA to know that how their regulated bodies would plan to deal with these technologies or other crypto technologies.
The NCUA is a federal regulatory authority, which along with the Office of the Comptroller of the Currency (OCC) regulates the banks and form banking policies, including digital banking. The Crypto market directly falls under digital banking; hence, it is quite natural that officials are interested in viewing the future picture of the crypto market and how it will abide by the laws.
Unlike the U.S SEC, the Credit Union Regulators stressed the coexisting with the digital assets market under the premises of law. Nowadays, every federal banking regulatory authority is keenly looking at the crypto market. Apart from that, law enforcement authorities are actively investigating digital assets and crypto exchanges. In the U.S the overwhelming popularity of stablecoins and security-backed tokens really moved regulators.
As the result, multiple regulatory teams are examining the latest developments happening in the crypto marketplace. In its request, NCUA asked about the following issues: insurance, risk management protocols, transparency in operations, regulatory authorities, and other related areas that fall under the Credit Union Jurisdictions.
The stakeholders also asked questions about the insurance of stablecoins. Kyle Hauptman, the Vice Chairman of the NCUA, earlier this week lectured his organization to carry out a detailed examination about the stablecoins. However, there must not be any aggressiveness or biasness in the findings he further added.
Previously SEC has been questioned by the court about their malign intentions towards Ripple, during the public hearing of a lawsuit filed against Ripple by the SEC representative. However, in response to NCUA concerns crypto exchanges said that they are willing to work side by side with the regulators to ensure them that the crypto market is willing to play by rules and regulations.
The U.S is in the pursuit to be the center of this new industry, the only way the U.S can claim itself as the crypto world’s center is by regulating the industry.