Trends & Research

Trends & Research

Access the power of data and objective insight. Data from various sources, including NEACH surveys and member interviews, is compiled and made available as white papers, case studies, articles, benchmarking, and industry reports to provide a snapshot of both the current and future payments landscape. 

Published on Sunday, November 14, 2021

The New Role of Operations and Cryptocurrency


With the New Role of Operations Workgroup's white paper complete, the workgroup directed their attention to another topic during its August meeting-cryptocurrency and its impact on operations. Subject-matter expert Peter Tapling, Managing Director of PTap Advisory, LLC, gave a high-level overview of the topic and answered workgroup members' questions. Tapling stressed the importance of financial institutions becoming and remaining aware of what's happening in the cryptocurrency space throughout the presentation

"According to a recent report, 60 percent of consumers have traded in cryptocurrency," Tapling said. "With some of those transactions being processed through the ACH Network and going to companies like Coinbase and Kracken, it's important that financial institutions become more aware of cryptocurrencies."

What is Cryptocurrency?

Let's start with the basics. What is cryptocurrency?

"Cryptocurrency is decentralized digital money, based on blockchain technology," explains Forbes Advisor."You may be familiar with the most popular versions, Bitcoin and Ethereum, but there are more than 5,000 different cryptocurrencies in circulation, according to CoinLore."

People use cryptocurrency to purchase goods and services. But many people invest in cryptocurrencies as they would other assets, like stocks or precious metals. Still, investing in cryptocurrency can be risky and takes a good amount of research to understand how each system works, Forbes Advisor cautions.

Key Points for Financial Institutions

While Tapling dived into some of the intricate details surrounding cryptocurrencies, two key points rose to the surface.

First, if you look at your members/customers' accounts, the chances are that you have some ACH transactions fueling crypto buys. This means, by extension, your financial institution is in cryptocurrency, and you need to be on top of it. In January 2021, the Office of the Comptroller of the Currency released OCC 1174, an interpretive letter that addresses cryptocurrency, treating it in much the same way as electronic stored valued cards.

With some ACH transactions fueling crypto buys, does this mean that every financial institution should run out and offer custodial accounts on digital currency to their customers and members?

"No," said Tapling. "But if you're not aware of it, and if you don't have an innovation person whose job it is to keep track of this stuff, it will stampede you eventually."

Second, there's been much talk about the Federal Reserve considering a digital currency. Whether that will or will not happen remains unclear. Without Congressional action, the Fed can't move forward to issue accounts directly to consumers. But if past congressional hearings are any indication, there may be more to come in the cryptocurrency space.

Regardless, cryptocurrency is gaining attention among consumers and government entities, which underscores why it is essential for financial institutions to become and remain aware of what's happening in the space.

New Role of Operations White Paper

Next up on the agenda, workgroup members had an opportunity to provide input and offer suggestions on the white paper in its designed format. Members' comments were overwhelmingly positive and reflected the group's desire to get this tool into the hands of financial institutions sooner than later.

The white paper is now available. You can download it here.


Joe Casali, AAP, NCP


AUTHOR: Joe Casali, AAP, NCP
Executive Vice President

As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.

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