Traditional banks may still lead the financial industry in terms of assets, but credit unions are gaining popularity among eligible Americans.

Recent data reveals approximately 4,600 credit unions in the United States. A September 2023 report from the National Credit Union Administration  highlighted that nearly 139 million Americans were members of federally insured credit unions, marking a 20% increase over the past five years.

Additionally, the credit union market size measured by revenue totaled $126.2 billion last year.

John Wingate, CEO of financial platform BankSocial, explained to Cryptonews that a credit union operates as a member-owned bank. “Unlike for-profit banks owned by shareholders, credit unions are owned by the members, one member, one share, one vote,” said Wingate. “This aligns perfectly with the decentralized finance ethos.”

Despite this alignment, credit unions face challenges that could hinder future growth. Kyle Hauptman, Vice Chairman of the NCUA, noted that credit unions often engage in a cumbersome process called ‘loan participations,’ where ownership interests in a loan are divided and sold. This process can be complex, as the credit union purchasing a participation stake may not know if payments have been made or if the selling credit union will pay the required portion.

Hauptman suggested that tokenizing smaller loans could address these challenges. “A smart contract would automatically pay the buying credit union their share,” he said, eliminating the need for the purchasing credit union to inquire about payments.

Ravi de Silva, Managing Partner at de Risk Partners, mentioned that tokenization could enhance compliance risk management by providing greater transparency, security, and efficiency. He pointed out that tokenization could be beneficial for Anti-Money Laundering (AML) purposes by enabling efficient analysis of transactional data and improving customer due diligence processes.

Given these benefits, some credit unions have begun implementing tokenization solutions. BankSocial is working with several credit unions to tokenize identity and transactional data through hashing. Wingate noted that BankSocial’s solutions use Hedera Hashgraph’s distributed ledger technology  to tokenize payments and deposits for peer-to-peer transactions on the Hedera network.

Additionally, Metallicus, through its Metal blockchain, is collaborating with credit unions like Vibrant, Meritrust Credit Union, and Fairwinds to develop blockchain-based solutions. According to Marshall Hayner, COO of Metallicus, the Metal blockchain enables financial institutions to create interoperable ledgers for seamless communication.

Despite these advancements, regulatory concerns persist. Hauptman mentioned that credit unions are uncertain whether tokens might be deemed securities. While the NCUA has provided guidance for tokenization use, other regulatory concerns remain, including KYC processes and the custodianship of tokens.

Nevertheless, Hauptman believes that U.S. credit unions are better positioned to implement tokenization compared to banks, thanks to NCUA’s regulatory clarity. For example, in July 2021, the NCUA published a “Request for Information and Comment on Digital Assets and Related Technologies” report, followed by guidance documents on digital assets and distributed ledger technologies.

De Silva emphasized the importance of credit unions working closely with compliance teams to adopt industry best practices for tokenization. “It’s crucial to establish a robust framework that aligns tokenization practices with regulations while prioritizing the security and privacy of customer data,” he said.

With continued collaboration and adherence to regulatory guidelines, credit unions can successfully navigate the complexities of tokenization and harness its potential benefits.

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Popular canine-themed meme coins, Dogecoin (DOGE) and Shiba Inu (SHIB), experienced a significant spike on Friday following a tweet from Elon Musk about the passing of Kabosu, the dog that inspired these tokens.

DOGE surged by as much as 5%, reaching a session high of 17.3 cents within minutes of Musk’s tweet, while SHIB increased nearly 3% during the same timeframe. Despite these gains being short-lived, with both cryptos pulling back, DOGE remained up 6% and SHIB up 1% over the past 24 hours, outperforming the mostly flat CoinDesk 20 Index.

This market activity highlights Musk’s influential impact on memecoins, sparking speculation among crypto enthusiasts about his potential role as one of the largest Dogecoin holders and the possibility of integrating the token into a payment system for X (formerly known as Twitter, now owned by Musk).

Kabosu, the Shiba Inu that became the face of Dogecoin and other meme tokens, passed away early Friday, according to a blog post by her owner. Kabosu was over 17 years old.

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OKX, one of the largest cryptocurrency exchanges globally, has opted to withdraw its application to operate in Hong Kong, marking a notable development in the regulatory landscape.

In a recent announcement, OKX cited strategic considerations for its decision to withdraw its application for a Virtual Asset Service Provider (VASP) license in Hong Kong. The exchange emphasized that this move followed careful deliberation of its business strategy.

As a result of this decision, OKX will cease providing centralized virtual asset trading services in Hong Kong by May 31. However, customers will retain the ability to withdraw their funds from the platform.

This withdrawal comes amidst a trend of other applicants retracting their applications from the approval process. Notably, earlier this month, several applicants, including the Hong Kong-based subsidiary of HTX and Huobi Hong Kong, followed suit by withdrawing their applications with the Securities and Futures Commission.

The Securities and Futures Commission is currently reviewing license applications from numerous major cryptocurrency exchanges, including Crypto.com and Bullish, the owner of CoinDesk. However, the regulator has only approved two exchanges thus far, with the latest approval granted in 2022.

OKX’s decision to withdraw its application underscores the evolving and complex regulatory environment surrounding cryptocurrency exchanges. As the industry navigates these regulatory challenges, exchanges must carefully evaluate their strategies and adapt to ensure compliance and sustainability in the long term.

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The adoption of cryptocurrency is significantly bolstered when large funds, such as pensions and endowments, begin investing. Notable among these are university endowments, which manage substantial assets for their respective institutions.

The University of Michigan is actively participating in cryptocurrency investments through the CNK Fund I, L.P., managed by Andreessen Horowitz. This fund targets “cryptonetwork technology companies across various stages, from seed to growth.” In June 2018, the University of Michigan’s endowment made an initial investment of $3 million into this fund. As of June 2023, the endowment’s total value was $17.9 billion.

Recent communications to the university’s Regents indicated additional investments in this fund, although the exact amount remains undisclosed, it is presumed to be in the millions.

The university’s rationale for this investment is based on the belief that “crypto has become an important area of innovation and entrepreneurship that warrants focused attention,” and as the opportunities related to cryptonetworks become more defined, the need for a separate thematic fund may diminish.

The University of Michigan is not alone in this venture. Yale University, with an endowment valued at $40.7 billion as of June 2023, contributed to a $400 million capital raise for a crypto fund from Coinbase (NASDAQ:COIN) and Pantera Capital in 2018.

Similarly, the Harvard endowment, the largest at over $50.7 billion as of June 2023, has also invested in cryptocurrency funds. As early as 2018, Harvard disclosed investments in “at least one cryptocurrency fund.”

Other prominent universities, including Stanford University, Massachusetts Institute of Technology, Dartmouth College, and the University of North Carolina, have also allocated funds to crypto or crypto-related investments.

Despite the initial wave of investments in 2018, follow-on investments and additional commitments have been made in subsequent years. As the cryptocurrency market evolves and becomes more accessible through avenues like spot ETFs, it is likely that endowments and large funds will continue to increase their crypto investments.

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The US Securities and Exchange Commission (SEC) has made a groundbreaking decision by greenlighting the potential launch of eight exchange-traded funds (ETFs) tied to ether, the world’s second-largest cryptocurrency. This move comes on the heels of the SEC’s earlier approval of bitcoin ETFs, marking a significant shift in the regulatory landscape for digital assets.

The approval of ether ETFs represents a notable departure from the SEC’s historical stance on the cryptocurrency industry. Legal victories, such as Grayscale’s successful challenges against the SEC’s rulings, have played a pivotal role in prompting the agency to reconsider its approach to spot ETF applications.

Crucial rule changes paved the way for the SEC’s approval, enabling ETFs to directly invest in ether, the native cryptocurrency of Ethereum. Major financial institutions including BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton have received the regulatory green light. However, further approvals are required before these products can officially enter the market.

The SEC’s decision follows months of anticipation, with the regulator unexpectedly providing feedback on pending applications earlier in the week. This swift action is likely in response to looming deadlines for responses to ether ETF applications.

The anticipation surrounding these approvals has triggered a surge in ether’s price, soaring over 20% since Monday and more than 60% since the beginning of the year. This surge underscores investors’ growing confidence in the mainstream acceptance of cryptocurrencies.

Ether currently commands a market capitalization exceeding $450 billion, constituting approximately 18% of the total cryptocurrency market value, according to CoinMarketCap data cited on Yahoo Finance.

Industry experts have hailed the SEC’s approval of spot Ether ETFs as a watershed moment for crypto adoption within capital markets. Sergey Nazarov, co-founder of Chainlink, emphasized the significance of Ethereum ETF approval in fostering mainstream adoption. Sumit Gupta, Co-founder of CoinDCX, described the SEC’s decision as a maturing regulatory environment conducive to mainstream adoption.

The SEC’s approval lays the groundwork for the potential inclusion of ether in investment portfolios, including retirement accounts and pension plans. Furthermore, this development is expected to buoy bitcoin prices, which have already been gaining traction since receiving approval earlier this year.

In Washington, a bill aimed at reducing the SEC’s influence on crypto regulation and establishing the Commodity Futures Trading Commission (CFTC) as the primary regulator for cryptocurrencies has passed the US House of Representatives. This legislative initiative reflects evolving attitudes toward crypto regulation and underscores the dynamic nature of the regulatory landscape.

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