NCUA sends letter to FCUs on use of distributed ledger technologies

On Wednesday, the National Credit Union Administration disseminated a letter clarifying certain expectations for credit unions contemplating the use of new or emerging distributed ledger technologies (DLT). The letter reads, in part: 

The rapid emergence of financial technology is creating opportunities for credit unions to increase speed of service, improve security, and expand products and services. In this spirit, the board is exploring how the agency can provide clarity around expectations regarding financial technology adoption to not impede safe, fair, and responsible federally insured credit union engagement. 

The letter also covers: 

• Risk and risk-mitigation strategies 

• Information and cybersecurity risk 

• Legal and compliance risk 

• Strategic and reputation risk 

• Liquidity risk