The National Credit Union Administration (NCUA) has issued a pre-charter to the Maven Federal Credit Union (MFCU) to form the first blockchain-based credit union in the United States. The MFCU is sponsored by the Government Blockchain Association (GBA) and shares a single common bond. In other words, the field of membership of the credit union is the members of the GBA.
The Federal Credit Union Act is ideal for blockchain ecosystems because they enable the implementation of a blockchain ecosystem under the jurisdiction of the NCUA rather than the Securities & Exchange Commission (SEC). It appears that credit union rules seem to be tailor-made for blockchains because credit unions are non-profit organizations and not owned by a for-profit entity like a bank. Credit unions make decisions by surveying their members. In the blockchain space, it is called consensus. Credit unions exist for the benefit of their members (like a blockchain ecosystem) and require full disclosure of information to network participants like a blockchain system.
The GBA and Maven Federal Credit Union are working with the NCUA to establish the framework for chartering a blockchain-based credit union. Once that is done, there will be a pathway for tokenized blockchain projects to gain legal protection against potential securities violations. While the NCUA rules still require AML/KYC to prevent nefarious activity, this framework will clear the way for tokenized blockchain mass adoption.
Using blockchain technology to decentralize banking functions reduces costs and increases benefit to members of the credit union. Some of the benefits that the blockchain credit union will extend to its members include:
- No more punitive overdraft fees
- Removal of all predatory aspects of financial services
- Digital assets will remain in the hands of the people. (Main Street not Wall Street)
- GBA Members will be able to make loans and investments (Crowdfund) in GBA member projects- Profits from those loans and investments are returned to GBA members
- Dividends earned by being a relay node or participant node in the network
- A bank that is owned by its account holders/members
- Making history
To learn all about this transformative development attend the Future of Money, Governance, and the Law in person at the National Press Club in Washington, DC, or virtually on January 27-28, 2022. Virtual tickets are free. For more details go to https://bit.ly/2022-FoMGL.