CUs, League Celebrate Gov. Youngkin's Signing of Virtual Assets Custody Measure

CONTACT:
Lewis Wood
Vice President of Public Relations and Communication
Virginia Credit Union League
424.237.9629
lwood@vacul.org

Gov. Glenn Youngkin yesterday signed credit unions’ virtual currency custody services bill into law, making Virginia among the first states to codify such authority for credit unions.

The measure would permit any credit union in the Commonwealth to engage in virtual currency custody services to the same extent as any bank. After the July 1 effective date, credit unions will be authorized to secure private keys for their members’ digital assets in a manner like a safe deposit box, with the member retaining control of the asset and the credit union simply securing it.

“The virtual asset marketplace is growing, and members of the public crave the peace of mind that comes with having a trusted partner, like their credit union, serve as custodian for those assets,” said Virginia Credit Union League President/CEO Carrie Hunt. “Custodial services have long been recognized as an important component in supporting and growing the virtual asset market. With a safe place to store and hold those assets, it’s easier to buy, sell and use those assets.”

Public interest in virtual currency is growing, despite the failures this past year of well-known crypto companies and exchanges, and the recent demise of two banks that engaged in digital asset banking as a core business service. Those banks engaged in services wholly different than the custodial services that Virginia’s credit unions will soon be able to offer.

The growth of virtual assets and digital currency is being fueled by the growing number of businesses that now accept cryptocurrencies as an official payment method. In addition, the “virtual asset” marketplace has expanded dramatically in recent years, with the rise of stablecoins (a type of cryptocurrency); non-fungible tokens (NFTs), and Decentralized Finance (DeFi).

"We are keenly interested in the legislative and regulatory discussions surrounding virtual currency and digital assets, particularly the discussions in Congress," noted Hunt. "Some credit unions desire to responsibly offer virtual asset services to meet the needs of their members, but they want greater regulatory clarity before doing so. We view our efforts on this custodial services bill as an important first step for Virginia’s credit unions and thank lawmakers and Gov. Youngkin for their support."