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Michigan Credit Union League

2022 AC&E Preview: Interview with Keynote Speaker Glen Sarvady

On June 9, during the first Center Stage! of this year’s Annual Convention & Exposition (AC&E), Glen Sarvady is delivering his keynote presentation, “Cryptocurrency and Digital Asset Frameworks.”

Sarvady is a 20+ year veteran of the payments and FinTech industries. His firm 154 Advisors provides actionable insights, data-driven analysis and strategy formulation to help FIs navigate the rapidly evolving payments landscape, with specific expertise in electronic payments, digital wallets, consumer/SMB behavior and customer segmentation. Sarvady is also a founding director of the Technology Association of Georgia’s FinTech Society and holds a bachelor’s of arts from Northwestern University and a master’s of business administration from the Wharton School.

A surprisingly broad swath of Americans are already investing in Bitcoin and other cryptocurrencies, with many more expressing interest in following suit and indicating a preference for doing so through their financial institution. Mass market apps like Venmo and PayPal have created an easy on-ramp for the "crypto curious," and there is solid evidence of member deposits being diverted to various crypto exchanges.

Sarvady’s presentation looks at credit unions’ place within the crypto space, including available technologies and the market’s longer-term outlook.

MCUL talked with him to hear more before June’s AC&E.

MCUL: What is the biggest hesitancy for financial organizations to get involved in crypto? 
Glen Sarvady: I'd say the two main barriers remain a lack of regulatory clarity and reputational risk. The clarifying letter issued by the NCUA in December provided some comfort on the former, and likely contributed to several credit unions launching crypto services in early 2022. Reputational risk is a more credit union-specific consideration. Much like stock and commodities trading, crypto is not for everyone. Credit unions should determine their own segmentation strategies, as well as the desired breadth of financial relationship they wish to cultivate with members.

Is there a different calculus to getting involved in crypto for small credit unions as opposed to larger institutions?
For the most part, the factors are similar, as service providers stand ready to provide the necessary support. Very small credit unions with limited product portfolios may wish to consider how well crypto aligns with their existing offerings, and whether their team has sufficient compliance bandwidth.

What would you say to credit unions that are worried about the current (real or perceived) instability of cryptocurrency?
If by instability you're referring to price volatility, it could be argued that crypto's repeated recovery from price declines actually demonstrates its long term resilience. I'd also say to "follow the money," as plenty of established names are making significant investments in the space.  

Finally, it's hard to refute the fact that a growing share of Americans are already engaged in crypto. The Biden Administration's Executive Order placed this share at 16%, and several published studies cite higher figures. At a minimum credit unions should have a communication plan in place for its position on crypto, and should be monitoring market developments and have contingency plans for a quick response if current trends continue. 

Anything else you think attendees should know in prep for your presentation?
I'd encourage attendees to run a query on members' transaction activity, with an eye toward outflows to the leading crypto exchanges (query for inflows as well, although this tends to be a one-way street). It's often eye-opening to document the extent to which members are already engaged in crypto, and siphoning credit union balances to other financial entities.

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2022-04-28 00:00:00