Feb 17 '22

Cryptocurrencies and Credit Unions with Visions FCU and Quinn DuPont

Learn more about the challenges and opportunities credit unions have with cryptocurrencies.

Holly Fearing

Hello everyone and welcome to the Filene Fill-Im. I'm Holly Fearing with Filene. The Filene Fill-In is the podcast where we fill you in on what's been going on here at Filene's home base and out and about in the financial services world. Today's conversation is one I guarantee you've thought about before if you work in the credit union industry, and if not even better, that you'll catch up on the conversation now. Today we're talking about credit unions and cryptocurrencies. This is a special conversation, however, because we're not just talking about it in hypotheticals and theories. Yes, we've got one of the world's leading experts in the topic to educate and enlighten us on a slice of the giant crypto pie. We wouldn't be the Filene Research Institute without doing that, but we're also lucky to have credit union cryptocurrency practitioners talking about what they've been up to in the space and where they're taking it next in support of their credit union strategies, growth goals, and bottom line. It's a wide ranging and practical conversation from theory to action in which every one of you will take away at least one new idea. And if you don't let us know and we'll get you the links to our researchers entire published works.

Okay, so here it is folks. You're about to hear from not only one, but two senior leaders from Visions Federal Credit Union focused entirely on digital assets, Cynthia Schroeder and Joe Keller, as well as cryptocurrency researcher Quinn DuPont, who since 2014 has helped set national public policy, advise startups and consulted with brick and mortar organizations. They'll share about the state of crypto and credit unions, how the pandemic changed the crypto landscape, advice for credit unions getting into crypto and more. Thanks for listening and be sure to stick around until the end for some interesting ideas on the use of NDFs and crypto wallets. All right everyone, for today's conversation I have Dr. Quinn DuPont here with us, and he is the founder of Alumni and a former assistant professor in the school of business at University College, Dublin. I also have Cynthia Schroeder, SVP digital assets at Visions Federal Credit Union, and Joe Keller is joining us as well, VP of digital assets at Visions Federal Credit Union. I'm your host, Holly Fearing, senior director of marketing and communications at Filene Research Institute.

So a little bit of background on what we're talking about today for our credit union listeners, we at Filene have been doing a number of research reports on crypto and credit unions, and Quinn has been our principal researcher on those reports, and there's a lot, a lot to talk about. So we brought in Quinn to give us an update and we brought in Cynthia and Joe to help us just talk through this really complicated topic. I mean, it could go in a lot of different ways, but we're talking about cryptocurrencies and just what do credit unions need to know right now about the state of digital and cryptocurrencies, what risks and opportunities exist, what credit unions are already doing related to crypto and what it's going to kind of look like on the horizon. So that's why we're talking about this today with these three folks. So welcome to the podcast Quinn, Cynthia and Joe. I'm so excited to have you on for this topic.

Quinn DuPont

(03:34): Happy to be here.

Holly Fearing

(03:35): Great and let's just jump right in. Quinn, I wanted to start with you. You, as I said, are working on the research with Filene and just starting, just so we can all have a simple point of reference to define, what do you mean more precisely when we're talking about crypto and digital currencies?

Quinn DuPont

(03:56): Yeah, thank you very much. That's a tough question. It's one that's plagued crypto, what we now call crypto, for years and years, and we're really starting the research actually not presupposing that. We're letting the leaders that we're talking to sort of self-define. But of course there's many ways we could just to kind of be a little less abstract. We could talk about it. We could say, well, we're talking about digital ledger systems. Special kinds of digital ledger systems that utilize probabilistic security. I often like to think of these as value technologies, that's kind of a helpful way of thinking about 'em and, or we can speak a little more sociologically. What are we talking about here? What we're talking about, the sort of socio-technical apparatus that came out of 2009 release of Bitcoin. And sometimes, you know, I mean, terms like blockchain can be helpful because sometimes there's blocks and there's chains, but in other cases, we're looking at technologies that don't have those components, but nonetheless, they sort of stem from the same sort place. So it's a big, you know, wide world that covers everything from credentials or NFTs to, you know, things that really look like money to investments and anything under the sun really.

Holly Fearing

(05:15): Okay, great. So you mentioned NFTs and I'll have a question on that for you in a little bit, cause there's been so much about that in the news lately and it's kind of wild, but going deeper into what you just said, so why is this an important topic specifically for credit unions?

Quinn DuPont

(05:35): Yeah, I mean, this is one of the main kind of things we wanted to understand about how crypto is impacting credit unions. Immediately one of the things that's emerged is that there's real worries about disintermediation and outflow, right? So it's pretty clear to everyone that crypto is a business disrupter to pretty much every industry it touches, right? And so this has long been a challenge or an opportunity for the kind of high finance side of, you know, banking basically, they have a pretty long history with crypto. That was some of the very first companies that were kind of coming into crypto, but that sort of retail side, the side that touches, you know, humans a little bit more closely, that's actually much less developed. And I think that is kind of one of the reasons why credit unions have this sort of opportunity and these challenges because you know, maybe we're looking at new forms of payment suddenly, or finally, perhaps, because this is not something that we've seen traditionally be developed with crypto, even though it kind of comes out of this imagination of it being very much like money.

Holly Fearing

(06:46): And in the course of the research that you've done so far with Filene, what are you finding as kind of key implications for credit unions or, you know, if you could give us a bit of an executive summary of your work so far.

Quinn DuPont

(07:00): Yeah, absolutely. So, you know, we're starting from that sort of that classic market landscape work. So I've been talking to a range of people associated with credit unions and just asking these open broad questions about how, you know, they see the impact of crypto. So this has included credit union leaders, middle management, and even people in the broader ecosystem, which actually, this is someone we could talk more about is like partnership companies. And this is a really important part of how credit unions are approaching crypto. So if I had kind of like one sentence to sum up crypto and credit unions, like all this research, I think it's actually, it's sort of this obvious one that after a decade of development, we have to sort of admit that crypto is here to stay, whether people like it or not, it is here to stay right? And what I've been hearing is that credit unions feel like they're behind the ball here. There's a sort of fear of missing out. As I mentioned, they're worried about disintermediation and they're worried about, you know, deposit outflows. Like this is a potentially very disruptive mechanism. And so our research kind of looks at some of those challenges and those opportunities to sort of give it a positive note. I actually think that credit unions are well positioned to lead some of the expansion into maybe what we could call lower forms of finance or sort of the real retail banking kind of perspective. And that's because I think credit unions, and they understand this, is that there's these rich contact points that they have, the long tradition of servicing their members. And I think this is something that credit unions see as being really important to what they do, primarily, and that there is opportunities for them to expand that into this crypto world. So it's not just a threat, but it's definitely a threat, it also has these really interesting opportunities as well.

Holly Fearing

(08:58): Okay, great. And so I'm really excited that we have Cynthia and Joe here with us from Visions. So we're not just talking about credit unions, we're talking with credit unions too. Cynthia, Joe, I'd love to know more about how, you know, your roles are fully invested in looking into the use of digital assets at Visions and exploring the use and risk and opportunities. Can you talk a little bit about this work that you're doing around digital assets and kind of where you're at in that journey for your credit union?

Cynthia Schroeder

(09:34): Yes, we definitely can. You know, our journey started with a focus on education and awareness way back. We began by tracking the outflows and the inflow of money from crypto exchanges. You know, this helped us determine the interest level of our membership and the growth that we stall continue with the outflows. We moved to attending webinars and taking courses and gaining certifications all to try to grow our knowledge. What we found out early on is that the banks were so far ahead of us and that was concerning and we needed to catch up. So, you know, next we started building new relationship throughout the credit union industry to try and find out what other credit unions were doing, what some of our credit union associations were doing around this space. We completed NCUA'S request for information on digital assets and related technologies, working closely with NAVQ and the Blockchain Association. And that exercise provided us a great deal of education, took a long time, but we were able to pull that together and get that filed. We then worked closely with NCUA pushing for regulatory guidance to be able to allow our members to buy, sell and hold crypto. And as you know, the guidance came out at the 2021, which allowed Visions to roll out their offering with NYDIG to allow our members to buy Bitcoin through our mobile and online channels. And then our journey continues with just identifying, investigating digital asset opportunities that could have an impact on our members, our employees, our communities, and the overall credit union. Currently on the roadmap for further investigation is crypto rewards. Also very interested in understanding the value of smart contracts and NFTs as Quinn mentioned and as soon as we have more guidance on what we can do with lending and investing, we'll be moving into those opportunities or considering and investigating those opportunities.

Holly Fearing

(11:40): Yeah, that's interesting cause I've been talking to a few folks in the credit union industry and the regulatory environment around digital assets is pretty constrictive in that it's not allowing credit unions to use them for lending. Is that something that you're exploring right now or expecting the regulations to change around?

Cynthia Schroeder

(12:06): We're hopeful. We've set up monthly meetings now with some key, NAVQ and the Blockchain Association to keep us up to date. We actually have a meeting this afternoon, keep us up to date with what's happening and then what can we be involved in to try and help push this along cause right now it's unknown. We don't know what we can and cannot do, but we do know that we have business accounts that have large crypto portfolios and we do need to understand what we can do around, you know, can we use it for collateral? What other opportunities do we have?

Holly Fearing

(12:47): To me, maybe this is not correct, but it seems like Visions is really ahead of the ball on this kind of work, but you might know more, is this common for credit unions to be having these conversations and exploring these topics right now?

Cynthia Schroeder

(13:05): It is common. It's starting to become common, so we are definitely not unique in this. We've heard of several credit unions that have already signed up with NYDIG also and they have the, the product up and running. You know, we have interactions with a number of credit unions that are also at the same stage as we are where they're building their education, their awareness. And you know, they're moving into opportunities that are available to us right now, which are not a great deal around this space. You know, we created, Visions created an external digital asset user group back in 2021 that meets every two months. And the mission of this group is education and awareness, learning together as an industry. We started with only 14 and we now have over 50 that are part of that group, which to me shows the interest level growing in the credit union network.

Holly Fearing

(14:00): That's great. I mean, this is clearly important and Quinn, you are an expert in crypto and digital currencies well beyond just the credit union industry. Can you talk a little bit about why this is an important topic for research organizations, think tanks like Filene to study and where do you see this all going in the future?

Quinn DuPont

(14:26): Yeah. This is just a classic case of a disruptive technology and so I think that it's vitally important that research organizations like Filene get in front of it and try to understand it. I think one of the kind of curious things that most people who don't have a necessarily a longer history with crypto, perhaps they don't understand is that despite being promised as this sort of digital money, the money-like qualities of crypto have actually been pretty much downplayed through most of its history. And so instead we see a really rich tradition of like FinTech and then with blockchain, we see, you know, distributed computing, right? I think there's many reasons for this. They include social business regulatory issues, right? Cynthia, you were just talking about the challenges around the barriers to adoption around regulation, but also technical reasons, scaling and these kinds of things. But what I think is emerging from this research, and I think this is why credit unions are now starting to get really interested in crypto is that there's a perception that the barriers are now sort of being lower, like many of the sort of socio-technical issues have been taken care of. There's a big consumer demand. Regulatory issues are, you know, getting clearer, but long ways to go still. And then a lot of the technical issues have been solved. It's very possible now to have fast transactions and like large scale, high scale and all these kinds of things. So I think that's kind of like renewing this interest in crypto with its more money-like qualities. That's obviously in addition to everything it's been doing so far around, you know, DeFi and FinTech and as an investment vehicle more generally. But I think there's a new field opening up and I think that's what credit unions are really sort of paying attention to right now

Holly Fearing

Oh, go ahead.

Joe Keller

(16:23): Holly, I would jump in and with what Quinn was saying, this is an innovative technology and while it's similar to other times the industry's been disrupted, digital assets cover so many things. You could go from the currency side to the technology side, to the payment side, to various other applications. So I think that's one of the biggest reasons, not just credit union, but all financial services in general are starting to look at this stronger and stronger, is this, doesn't just feel like a new product or a new operating system that can make things go faster. This could disrupt collectively what we do.

Holly Fearing

(16:58): Great. That's exciting. So, you know, that totally sets me up for what I wanted to ask Quinn about the research that he's done so far. You've literally written books on this. So I don't know if much surprises you about the research anymore, but is there anything that stood out to you as unusual or surprised you in a way that you didn't expect in the research that you've been doing so far for Filene around the credit union application of cryptocurrencies?

Quinn DuPont

(17:30): Yeah this is a technology that there's never dull moment. I've been studying crypto very seriously for a decade now and I'm consistently surprised by the ingenuity, the rapid speed of development, just the sheer scale of crypto. What I've learned is that when you start to dig into these topics, you find these these interesting edge cases, these really unique developments and these kind of surprises. And so there's many surprises that I've encountered when sort of studying credit unions and the impact of crypto, but sort of maybe two come to mind and the first is that there's this, I wanna say underdeveloped ecosystem of partnership seeking companies. And so what I mean by that is like, you know, really software as a service, but tailored towards credit unions. And this is something I've heard time and time again and we've already sort of mentioned on it. You know, partnerships with like NYDIG or other sort of competitors in that landscape, but it's actually a pretty small landscape. And I think possibly the reason is one because crypto, so not the credit unions, but crypto actually, it doesn't really have much of a vision beyond DeFi. DeFi in that sense of truly decentralized sense, so outside of the traditional FinTech world. And then two, I think a big one is, of course, it's just that there's regulatory barriers and this is prohibiting this space from developing. And what I've been hearing from credit unions is that because partnerships are so vital to be able to move into this space, that's a real challenge because there's not a really well developed ecosystem. And the regulatory barriers are keeping partnerships from happening and I think this is the risk here is that it's potentially disadvantaging credit unions in particular as against, you know, banks and other financial organizations.

Holly Fearing

(19:30): So for the Visions folks, I'd love to learn a little bit more about, so you talked about what you're doing and where you are in your journey, but I imagine there's probably a lot left to do. Can you talk a little bit about what you still need to learn, what you need to do, where you need to gain buy-in at your credit union in order to really fully tap into the opportunities you presented and Quinn presented about using crypto and then maybe talk a little bit about what risks are really giving you pause about all of this.

Cynthia Schroeder

(19:30): Sure. You know, we still have a great deal to learn. As Quinn said, this is all fast moving and changing often. Education awareness will be key to ensuring we make sound decisions as we identify and investigate additional opportunities. You know, our CEO believes this is so important to the credit union industry and he has added another senior level, Joe Keller is our new VP of digital assets. So we have two dedicated employees at senior level working on investigating and digging into what opportunities this brings for us. We're currently building out our strategic roadmap with a four prong approach; education awareness, identify, investigate, ideation and review, and then implementation. And we're using a prioritization metrics to help validate our decisions, ensure that they are moving us towards our growth goals, helping us improve our member and employee experiences and the bottom line. And I know Joe probably has a lot to offer there too, but as far as our risks, we continue to be concerned with the lack of regulation and the guidance. And this causes us concerned with moving too fast or moving too slow and member retention due to members moving to other services and exchanges and Visions being too late to get them back. Joe?

Joe Keller

(21:25): Yeah, I would say, Quinn spelled it, this environment and ecosystem is ever changing fast growing. And so I think the hard part, not only just for us as a credit union, credit union organizations, but collectively as financial services is trying to better understand where it fits, how it affects us as a business, how it affects our members or our customers and then moving forward, what regulations are going to play in part of how it can actually enable us to get there. I think Quinn said it best, there's really a big pause right now in the credit unions of we're waiting for guidance. We'd like to move forward. We'd like to push forward. We'd like to explore more possibilities. But without some regulatory guidance, even at least similar to what was released in the late 2021, some enablement of "yep, explore it. We're gonna give you the opportunity to explore here's what you should explore." So I think those are some risks, and then the great unknown. The education awareness and the lack of an understanding of what something means. You can ask a hundred people tomorrow, what is a digital asset? And you're gonna get a hundred different answers. So that continued education awareness, particularly of our members in our community, really is important for us as we grow what's kind of the next for Visions and beyond.

Holly Fearing

(21:25): And you had mentioned that this is something that could potentially be an opportunity for the bottom line. And I know that's something that CEOs and leadership at organizations and credit unions are always keeping an eye on, of course, as a business. So do you see this potentially being an essential strategic element to growth and profitability for your credit union?

Cynthia Schroeder

(21:25): Oh, we definitely do and our CEO does. We see, as the regulation opens up, we see opportunities to really reduce cost. I mean, if we can find ways to utilize smart contracts for example, escrow analysis, loan participations, things that take a lot of time and money to handle, if we can improve those processes with smart contracts, with the blockchain, with other opportunities, you know, those are what we're interested in. Yes. We definitely think that it would improve the bottom line.

Holly Fearing

(23:48): Quinn, we've touched a little bit on this, but threat, opportunity, a little bit of each, what do you see as like the state of crypto for credit unions?

Quinn DuPont

(23:59): I think it's a clear case of threat and opportunity both in the sense that the threat is potentially, it's existential, I actually think. I think there's a real risk of obsolescence. This comes from, well, it comes from the kind of dual and combined threat of, I would say neo banks and combined with crypto, I think there's a real worry about that. But there's loads and loads of opportunities. Cynthia, you just mentioned the efficiencies that can emerge, particularly from using blockchains in the backend. Credit unions are an interesting place to be part of new movements and identity and identity space. There's any number of big kind of changes, but there's also these like these really interesting, small little opportunities, I think, but small, but can actually really profitable, really lucrative for credit unions. Like one I keep hearing about is earning credit, earning crypto rewards on transactions. And this is something that is sort of unknown in, "wait there's opportunities for making money around rewards?" And I think crypto is a pretty easy one for that to transition. There's just lots really. I think that's what makes the space really exciting is that the combined threat and opportunity.

Holly Fearing

(25:28): So there's a lot of unknowns just in the world of cryptocurrencies, of course, with everything these last two years, we have to layer it on top of the pandemic that we're living in right now. I just wanted to know from any of you if you feel like the pandemic has specifically changed the landscape or desirability, viability, or use, anything else around cryptocurrency because of the last two years of living in this pandemic?

Joe Keller

(26:00): I'll jump on that one and just say from my perspective, the pandemic and the force to be social distanced, those kind of things, has increase the idea of, "I want to increase my ability to digitally interact with people." So tools and things had to continue to be evolved to enable that, and crypto and digital payment was one of those things that came along very fast with it and I think that was, let's call it fuel to the fire. I think as we continue to learn from the pandemic and we're starting to see that, oh, this has bigger implications than just social distancing or an ability to make a payment online. So I do think we need to be cognizant of is this something that is too fast? Are we moving too quickly to make change? Especially as you hear things of digital currencies and you know, the central bank, digital currency and things like that, there's a big FOMO driver behind a lot of this. So for credit unions and our member base, I think there is a big change given what's occurred. And it was more fuel to the fire than it was a new opportunity given the pandemic.

Quinn DuPont

(27:22): I think Joe nailed it, but you know, when the pandemic started, there were a number of newspaper articles that were talking about, this idea that there's gonna be some industries, that digitization is going to leap a decade ahead because of the pandemic. And I think that's true and I think that definitely this is one of the industries that has sort of leap a decade ahead, right. With respect to digitization, so that includes everything from the disintermediating effects to all the affordances that digitally provides us. In the same way that the office is now the home office, you know, we're seeing traditional financial services going through the same kinds of changes.

Holly Fearing

(28:12): So in addition to just kind of general continued digitization of everything, are there other main factors that we should be keeping our eyes on that would affect the opportunities and risks of cryptocurrencies?

Cynthia Schroeder

(28:29): I think it has to be, you know, regulation. It has to be what's happening with all the stable coins, all the talk about different coins and currencies. What's happening overseas around this. I think we have to, we have to watch it all. That's why it's so important for credit unions to be doing the education and the awareness piece now, so that we understand it and we understand the risks and the opportunities, but that we also take the time to really dig into the opportunities so we know those risks clearly. There's definitely going to be risks with any of the opportunities that we are looking into right now. We know there are risks, but we are doing our homework to make sure that we are aware and we put controls in place. And I think that's what we all have to do is just continue to monitor and be aware.

Joe Keller

(29:21): Yeah and I think I would circle back to the general statement of financial service institutions are risk taking organizations, it's how do we mitigate that risk the best. And for us at Visions, as Cynthia pointed out, it's huge around educating ourselves, educating our members, making it more aware of what the opportunities are and mitigating those risks as they come forward. Quinn has clearly articulated this isn't going anywhere and it's kind of get on board or you're gonna be left behind, not a you might be left behind anymore. So I think that's one of the biggest risks now as well for credit unions particularly is if you're not on and exploring this, you may be left behind.

Holly Fearing

(30:05): That's very well said. So what recommendations then do you have for other credit unions that are looking to explore and educate and you know, not suffer from that risk of being left behind.

Cynthia Schroeder

(30:20): Dedicate staff. Dedicate staff now to learn and explore the opportunities and the risks. I know staffing is a concern for many organizations right now, but I think this is just too important that credit unions really need to understand this. And there's a lot of free education out there right now. We were amazed by what we found. MIT has great courses around digital assets and related technologies that are free. Blockchain Association has certification opportunities that are very reasonable. There's just, and there's so many speaking opportunities now to hear from really some really strong experts out there that are free to credit unions. So taking advantage of all of that is what I would highly recommend.

Quinn DuPont

(31:09): And I'd stress Cynthia's, you know, desire for more and high quality education and training. I think workforce development is something that crypto more generally is going through right now. And I think this is something that while I agree with Cynthia entirely, that there's really good materials out there, I think there's a lot of room for improvement around everything from, you know, the credentialing side of things to, you know, to be honest, we need some big brand name educational and training materials to be developed. The kind that the sort of real blue chip players can feel confident that they're getting a good educational experience. There isn't always, however, with crypto the challenge that it moves so fast and I think this is something that both Joe and Cynthia kind of are reflecting that it's, you know, it's tough to keep up with it. This is what I do full time and it's very difficult to keep up with the pace of innovation. So I would just stress that that's something that credit unions need to really keep a close eye on is making sure that they understand the developments which come fast and furious.

Cynthia Schroeder

(32:26): Yeah, I agree Quinn. We've been trying to find educational resources to use for our membership and just that, that is very challenging to find. We do know a couple companies right now that are working on a 101, 102, 103 series to sell to credit unions for their members and employees, but that has been a challenge to find that type of material.

Joe Keller

(32:50): Yeah. I would add just to take away from the education piece, cause that's the obvious one we've all been harping on and also just say, they need to look internally as to what's happening at their own credit unions. Cynthia started off this journey around taking a look at the data, you know, what's happening to our member base, what was happening, what are our inflows and outflows, are we having member retention issues? And if you really want to understand what you need to explore, look at where you're bleeding, um, and you're gonna see the areas that this needs to be a focus. So, you know, looking for those opportunities of how is it affecting my members, is kind of the easiest first step to just validate the fact that I need to be more aware of this, more so even than the fact of everybody in the industry is just telling me I need to be aware of it.

Holly Fearing

(33:38): Okay and I mentioned this earlier in the conversation I wanted to get back to NFTs. I know it's only tangentially related, but I think our research team would really wanna talk about this a little bit. It's an interesting kind of application of crypto and in one more way that the crypto conversation is expanding into a lot of different industries and becoming more relevant with different consumer types. So I just saw this week that Twitter is now allowing people to use their NFT digital art as their background image on the app, if they connect their crypto wallets and they can verify ownership of that digital asset. Quinn, what are your thoughts on this? And just opine a little bit on what other emerging ways you're seeing crypto wallets come into our popular culture and use today?

Quinn DuPont

(34:32): Yeah, NFTs are obviously in the news a lot right now. Just to be, maybe to be pedantic and a little more careful with terminology here, an NFT, or non-fungible token, is really just a token that doesn't move around much. In particular what it does is it's able to sort of uniquely identify things in the world. And so it's application to art is how we typically think about it, right? So you get this piece of metadata that gives you ownership rights over, you know, some digital art say. That is only one of the opportunities that non-fungible tokens provide. They are much like a kind of a credential system in many respects, right? And so that brings us into the discussions around identity and to your point around wallets and the use of wallets and how they're changing. Wallets are fast emerging. There's lots of high quality wallets out there right now. There's still, of course, lots of risks around security and things like this is definitely something that people need to think about if they're looking to explore this area. The downside of crypto is that if it's a non-custodial wallet, so if there's no credit union involved perhaps, you gotta be your own banker. So that there's a real risk there, but the wallets are now, especially in the emerging web three space, they're becoming this interesting interaction point. So if you are logging into many of the web three experiences that are emerging today, you are typically, basically you're signing a document that you're kind of, you're becoming, you're sort of approving of a certain relationship with an organization and that's all happening through wallets. And so that's that larger identity question, and that's maybe only tangentially related to credit unions, but credit unions are, they're vital, trust institutions in society. And so there's certainly an opportunity to leverage the fact that there are these important trust institutions,

Joe Keller

(36:47) Quinn, I love that the NFT question led us to wallets because I think that actually is one of the bigger under discussed topics around digitization or digital currencies in general is, what do wallets really have to do and how does it actually affect a lot of the regulatory and compliance things that we already face from KYC, BSA, AML, et cetera. So this idea that you, as an individual are going to be able to start identifying yourself easier, clearer, digitally is really, really interesting. And I think that's another thing that all the financial services institutions, but credit union, particularly, as a trusted organization underneath all these regulations really is gonna be able to not only take advantage of, but also have to adjust to very quickly if it becomes part mainstream. The other statement you made around NFTs and understanding them, I think there's a huge misunderstanding around NFTs of, "oh, I bought an NFT, I owned something" and if you look into it deeper, it's like, "oh, I own the right to use this on a very specific exchange, but I don't actually even own it. I just own a copy of it and it can be sold." You know, so there's so much education around NFTs that needs to be done. And then to your point, you walked it to more the tokenization of things and as we go that route, I just see wallets becoming really important. We're discussing them heavily internally, already around what would it mean and what are the applications?

Cynthia Schroeder

(38:18) Yeah, we're really interested in NFTs. We've been spending a lot of time just trying to understand them. Is there an opportunity to help with title management down the road? We are aware of a credit union that created an NFT and is using it for fundraising. So it's really, that it's an exciting area. There's a lot of unknowns and a lot of confusion, but definitely an exciting area.

Holly Fearing

(38:41) Yeah, that's really interesting. That is definitely something for financial institutions to explore. Okay. So, I want to wrap it up now, but I'm sure there are things we didn't cover. Is there anything else that you would think our credit union listeners need to know or anything else that you wanna share on the topic before we wrap it up?

Quinn DuPont

(39:06) I'd simply emphasize sort of where I started that, you know, I've been researching this for a decade and I've always remained skeptical, but this is really isn't going anywhere. So the people that are skeptical today, it's not that, you need to become a true Bitcoin believer or something and there's maybe too many of those people out there, but I think everyone, but especially credit unions need to recognize that crypto's here and it's going to be changing the way your industry works. And so I would just sort of reemphasize that.

Cynthia Schroeder

(39:49) Yeah, I have to agree completely with Quinn. It's not clear the impact they offer us yet, but it is clear that we need to continue to learn and be ready for what is ahead of us and what opportunities this might open up for all of us.

Joe Keller

(40:02) Yeah, I think we already covered a great deal, and this is literally the tip of the iceberg. So are there other things we could cover? For sure, we could spend hours talking about this. Quinn spent 10 years looking at it. So, you know, there's plenty more topics. But I think the overarching thing is this is here, this is now, get onboard, you know, and start doing what you do with any disruption that you face in your industry. Evaluate it, educate yourself about it, and then best understand how it's gonna affect you going forward, and then put your risk manager hat on and understand how you can either utilize it or mitigate against it.

Holly Fearing

(40:39) Great. Well, thank you all so much for this education and this conversation, and it's definitely a conversation to be continued. I really appreciate you starting this with us here on this podcast though. So thank you all.

Cynthia Schroeder

Thank you and thank you for allowing us to be a part of this.

Joe Keller

Yeah, thank you.

Holly Fearing

(40:58) All right. That's it for the Fill-In folks. Thank you for listening. And of course, a huge thank you to Quinn, Cynthia, and Joe for taking the time to talk with us today. Filene will be releasing multiple research reports on cryptocurrencies and central bank currencies in March so be on the lookout for those at Filene.org/research. You'll have access to all the good stuff automatically if you're a Filene member, and if you're not well, you'll wanna email us at [email protected] to learn why you might wanna change that ASAP. We've also got a research event for you coming up on August 1st and 2nd in San Antonio, Texas bringing together the insights and experts from our research centers for Community Social Impact, Data Analytics and Emerging Technology. We'll be partnering with DCUC's annual conference, so if you plan to attend that, it should be easy to add on a couple days with Filene and we'll also have options for attending virtually so no matter what we've got you covered. We hope to see you there. Before we go, I wanna give a shout out to the sponsors of our Center of Excellence for Emerging Technology, CO-OP Financial Services and DCUC who made the work on this cryptocurrencies and credit unions report possible. If you like this episode, please do rate us on Apple Podcasts so more people can find us and make sure you are subscribed to the Filene Fill-In podcast so you can keep up with what's going on at Filene. You'll find us on Apple Podcasts, Stitcher, SoundCloud, Google Podcasts, or wherever you get your podcasts. To get in touch about today's show, email me at [email protected], or find us on Twitter @Fileneresearch. Until next time. Thanks everyone.