Vice Chairman Kyle S. Hauptman
As Prepared for Delivery on July 22, 2021
Thank you, Mr. Chairman. I know it’s unusual for someone besides the Chairman to speak first, so know the gesture is appreciated. Thanks to Board Member Hood as well for his support and contributions on this topic.
Last year during my Senate nomination process last year, I mentioned that one of my priorities was blockchain technology, so I’m personally gratified to see us moving on this. The context at my Senate hearing was about last year’s stimulus payments and the fact that about half of the payments, 88 million of them, took weeks to get to people because they were sent via old-fashioned paper checks in paper envelopes to mailing addresses that were often years-old. Hopefully in the future, digital assets & digital wallets will make it much easier the next time we need to send out badly needed, emergency cash.
But regardless of what I’ve made a priority, the NCUA would obviously have addressed this issue sooner rather than later. When it comes to cryptocurrencies and blockchain, it feels like we’re still at the beginning. If we were talking about the internet, this might be analogous to the dial-up AOL era.
I’m pleased to see agreement at the NCUA that early regulatory clarity is better than waiting until credit unions are left behind in a changing marketplace. The last thing we want is for credit unions to go the way of Blockbuster Video because their regulator didn’t allow them to compete. We’ve already seen assets move out of the traditional financial sector, and young people are getting used to using new fintech firms for their financial needs. Meanwhile, credit unions are ready to gain market share in services like remittances if we allow them to try new, easier, cheaper technologies.
So, folks, please submit any and all ideas, whenever you think of them. I’ve already talked to industry groups that have been working on responses to send us, partly because some of these groups are already responding to a similar request by the FDIC.
I’ll note that today’s Request for Information has a ‘catch-all’ question that basically says, “regardless of what’s in this document, send us anything you think the NCUA can do that would help.” I wanted to make sure that nobody can say that they didn’t send us an idea because the NCUA didn’t ask a particular question.
Stepping back from credit unions for a moment, the US is in a race to be the center of this new industry, much the way this country did so well with the internet economy. While I’m a Republican, I feel compelled to mention that one reason America dominated the internet industry is because, 25 years ago, Bill Clinton’s White House published principles that said the government will not interfere with the growth of this new technology. Millions of Americans have jobs today due to that early guidance from the federal government.
It’s possible that we’ll get similar benefits from the blockchain industry, provided we give our entrepreneurs and investors the clarity they need. We want people to make products designed for credit unions such that the current system can adapt and thrive. As a fiduciary of the Share Insurance Fund, it’s my obligation to help make that happen. Lastly, today’s RFI dovetails nicely with the NCUA’s mission around access and inclusion.