Merging onto the Crypto Autobahn: Why Credit Unions Can’t Afford to Cruise in the Slow Lane

If you feel like digital asset terminology needs its own English-to-Fintech dictionary, you aren’t alone. Between tokenized deposits, stablecoins, and good old-fashioned crypto, keeping up with modern payment rails can feel a bit like trying to merge onto the Autobahn in a 1998 minivan.

In this latest podcast by The Credit Union Connection, host Sarah Snell Cooke caught up with Nick Elledge, COO and co-founder of Stablecore, to unpack why payment modernization isn’t just a “nice-to-have” for credit unions—it’s fast becoming the main road.

As Elledge noted, citing a metaphor from one of his company’s backers: fintechs are currently cruising at 200 mph on the digital asset highway, while many financial institutions are still tentatively putting on their blinker. And with over 100 million U.S. consumers already holding stablecoins or digital assets right in their pockets—via apps like PayPal, Venmo, and Cash App—the member demand is already here.

Whether you’re looking to upgrade B2B services, streamline cross-border member remittances, or simply keep up with 24/7 member expectations, the consensus is clear: legacy payment infrastructure hasn’t had a major overhaul in half a century. It might just be time to get your ingredients ready.

Sarah Snell Cooke: Hello and welcome everyone. I am Sarah Snell Cooke, your host here at The Credit Union Connection. I’m joined today by Nick Elledge. Welcome.

Nick Elledge: Thank you so much, Sarah. It’s great to be here.

Sarah Snell Cooke: It’s awesome to have you. Now, Nick is the COO and co-founder of a company called Stablecore. So why don’t you tell us a little bit about yourself and the company?

Nick Elledge: Yeah, happy to. Stablecore helps credit unions modernize with new payment rails. Digital assets are coming fast and furious. One of our backers, the Circle Fund, said that all the fintechs are going on the Autobahn right now at 200 miles an hour, and credit unions are just merging in when it comes to stablecoins, digital assets, cryptocurrencies. And we help modernize credit union stacks with being able to use that within payments in particular. We do ledgering, orchestration, act as a type of sidecore so you don’t have to rip and replace your existing core. We integrate with all the major digital banking front ends and all the major cores within the credit union space to make that possible. Myself, I’m one of the co-founders of the company, and come from a background of fintech and financial services over the last 15 years.

Sarah Snell Cooke: Awesome. So you said a lot of words that I know people aren’t gonna necessarily understand, like ledgering. But, or at least in this context. Can you do a little bit of defining of stablecoins, tokenized deposits, and all the basic digital assets that are coming into the market now?

Nick Elledge: Yeah, absolutely. So this is something that comes up frequently at the executive level and at the board level, just understanding what is the difference between these different assets. And they are really different, so it’s not splitting hairs. It’s important to understand they’re totally different classes.

Now, one thing they all have in common is that they’re on blockchains, and they involve having blockchain technology. But a tokenized deposit is a deposit that exists at your institutions just like any other deposit, and has all the same treatment as a deposit, but it just uses a blockchain rather than a normal ledger. And there are a number of blockchain tokenized deposit networks that have sprung up in the past 6 to 12 months. And they’re gaining quite a bit of traction, I think, in terms of being able to move money efficiently between institutions, 24/7, in a very low-cost way.

Now, stablecoins have in common that they are also on a blockchain, and they also are $1 per coin, so it’s pegged. But rather than being related to the credit union, it is a liability of the issuer. For example, Circle—C-I-R-C-L-E, not the credit union fund—is a publicly traded company and one of the largest stablecoin issuers. They issue USDC, which is one of the most prominent, compliant stablecoins in the United States. Really you can think of a stablecoin as an IOU. If I just wrote an IOU on a sticky note and we passed that around, it would say, “Hey, I owe you this money.”

Now, the issuer is sitting on that money. That’s their reserves, and they typically hold that in treasuries. But all that’s being passed around as a stablecoin is that you could redeem that stablecoin at any point for actual money when you want to. And that is where all of the advantages of stablecoins come from, and why there have been trillions and even tens of trillions of dollars of transactions on stablecoins recently—all without credit unions or banks involved, which is really interesting.

So it’s an alternative payment rail. It’s an alternative way to store value, to store dollars, that has become very popular all over the world. It’s actually least popular in the United States because dollars work pretty well here, and you’re able to use them easily. But if you’re in a number of countries outside of the United States, stablecoins have been very popular. We like to say that the US dollar has very strong product-market fit all around the world. People wanna hold it. People want access to it.

Just as an example, Stripe, the fintech company, opened up last year the ability in 110 countries to have a stablecoin account. It looks and feels a lot like a bank account, but it uses stablecoins instead. It just boggles the mind to think of one single company opening up in 110 countries. I don’t even know if the largest banks have 110 countries of coverage. Maybe they do. But as a fintech, to be able to do that in a single year without really a lot of licenses or regulations keeping them from doing that.

And you can think of stablecoins really as these sort of synthetic dollars that are taking off very quickly. Now over 100 million US consumers have access to these in their pockets. So it’s coming from outside the United States to inside. Zelle is launching later this year with stablecoins. You can already get them on the PayPal app, the Venmo app, the Cash App, and the Coinbase app. Over 100 million US consumers already have these in their pockets now and are starting to use them more and transact with them.

And kind of the final category and the final distinction I’d put is all other crypto. Obviously Bitcoin is the largest of those. It has a multi-trillion dollar market capitalization. But a key difference is that with Bitcoin, no one really controls it. It’s kind of the Wild West, and we don’t even know who the creator is—the Satoshi, who they are, who he or she is, or if they may have even passed away; that’s the leading theory. And it can be used all over the world for whatever purpose you want to use Bitcoin for.

That’s in very stark contrast to, for example, stablecoins and tokenized deposits, where you are accountable to US regulators and you are a regulated entity. If there are bad actors using those, then you’re responsible for it, and oftentimes you end up freezing it. So there are examples of many billions of dollars of stablecoins being frozen by the largest issuers. This just happened about a month or two ago, because they’ve fallen into the wrong hands. So that is a power that you actually do have, and there is a lot more centralized control and trust, I think, with stablecoins than with traditional crypto.

Traditional crypto is everywhere. I think the latest survey said that something like 70 million Americans have traded or have some type of cryptocurrency. So it’s not a niche anymore. A lot of Americans have it or touch it in various ways. But there’s a pretty big gulf between a speculative, get-rich-quick type investment and then using it for payments. If I wanna close an auto loan on a Saturday and I need to have a payment rail to be able to do that, that’s very much more the realm of stablecoins and tokenized deposits than the other type of trading activity.

Sarah Snell Cooke: Yeah. Thanks so much for that. I appreciate it, ’cause I know a lot of people can get them confused. It’s probably pretty easy when you don’t spend your every day in it like you do. Now can you… you touched on this a little bit, but can you speak to the growing adoption and member demand? How quickly is this growing? Let’s start there.

Nick Elledge: Yeah, and it’s a mixed story there, and I’ll explain why. Now, we have a list—and we’re happy to share this with any credit union who would like it—of outbound destinations that are a clear sign that somebody’s intending to access cryptocurrency. If you have an ACH, a wire, or a debit card payment to one of these destinations, it’s very likely outflows from your deposit base going over there. And the statistics show that those tend not to come back. It’s really a one-way street. That’s been a large source of deposit drain, and having tools to fight against that and combat that—some of the most popular destinations include Robinhood, for example—and being able to maintain those deposits at your credit union is definitely one thing that you can analyze and look at.

But there’s a whole different side of it, which is just better, more intelligent, faster payments generally. Sometimes members don’t know to ask for that ’cause they don’t know what the capabilities are. It could be turning on FedNow, RTP, stablecoins, or tokenized deposits. But being able to have some sort of intelligent routing, some sort of ability to do smart scheduling for payments that you have—this is true both for members on the retail side, but then especially for corporate credit unions, or if you’re looking to get more into SMB financing or into corporate—having that intelligent payments capability is critical. We see that a vast array of tools is necessary to be able to do that, especially if you’re looking to send money cross-border. That’s one of the great use cases for stablecoins, and domestically we have other great tools to accomplish that as well.

Sometimes folks don’t know to ask for that, but once you have it, they love it. If you’re trying to close a mortgage or an auto loan at night or on a weekend and you need to get a payment out, but the transfer window is closed, you’re able to go around that with some of the new modern payment rails, which are 24/7.

Operationally—maybe we’ll get into this—credit unions do need to start thinking about and preparing for how we think about 24/7. Because that’s coming, and it’s becoming an expectation. It’s becoming a point of differentiation, but also a way to maintain member satisfaction and ultimately deposits on the balance sheet, because you do want to do that smart scheduling so that it goes out just at the last minute, and you can hold onto the deposit as long as possible before it’s actually needed to make that payment.

Sarah Snell Cooke: Now, when you mention corporate credit unions, are you talking about credit unions that make business loans, or are you talking about corporate credit unions that are like the credit union’s credit union?

Nick Elledge: Yeah, it’s a great question. I’d say both in a sense. B2B payments—or payments either from credit unions between themselves or to small businesses, like a corporate treasurer—or if one of your members… oftentimes what we see is that they just open their business account in normal retail member services, and there’s actually a different line of service that you should have as a credit union to be able to service them. There are plenty of upsell opportunities for them to have a great experience with you and for them to be a lifelong member.

Having separate business services is something that we’re increasingly supporting at a number of credit unions because it’s a fantastic expansion opportunity. Payments, real-time payments, smart payments, bill pay, integrated payables—all of this is really important to be able to support the average person who has a small business who’s maybe using QuickBooks or something else for their accounting, and then they just want to do some basic banking with the credit union.

Sarah Snell Cooke: Of course, the legislation already passed. Can you talk a little bit about why now is the time for credit unions to set a digital asset strategy and be ready to activate?

Nick Elledge: Yeah, and strategy is the right word. We encourage credit unions to form a DAWGS group—D-A-W-G, Digital Asset Working Group; feel free to steal that one. That should include risk and compliance, strategy, IT, operations, treasury, and liquidity, and get everyone on the same page when it comes to 24/7 and digital assets.

Just getting up to speed and making sure that you have that strategy formed—even if the answer is, “We’re not gonna do anything right now”—I think it’s really informative to understand: What is JP Morgan doing? How are they doing this? What are their use cases? What’s happening at Visa and MasterCard right now? They’re leaning in on this space very heavily and making big acquisitions in this space. What’s the strategy? What can we expect when it comes to cards and digital assets going forward? Cross-border payments, correspondent banking, what’s going on with Stripe…

There are so many companies that have launched digital asset products, including many of the fintechs, consumer apps, and banking apps. They all have it: Robinhood, Coinbase, et cetera. When you think about how to enhance your members’ experience, that’s definitely a part of it.

I think the bigger question—and this came up a lot at the Valira Digital Asset Lab recently—was really around payments. Thinking about payments modernization: How do we get off just ACH and start to really enhance member experience with smarter, faster payments? How do we reduce fraud when we’re still doing real-time payments? Those are really important questions, and ones that you should be thinking about and coming up with answers for right now.

So we definitely encourage thinking about it. In terms of timing, we’ve seen over the last 12 months so much activity on the digital asset front. It’s very different than maybe some of the earlier cycles in 2021 or 2022, which were a little bit more of a cryptocurrency frenzy or a bull market. Right now we’re seeing institutional adoption from really all of the major players. The New York Stock Exchange, the NASDAQ, BlackRock, JP Morgan, all the money center banks are adopting this. We’re seeing the biggest correspondent banks, like Bank of New York, adopting it, and it’s quite clear that this is gonna be one of the payment rails for the future.

If you wanna be relevant in these tens of trillions of dollars that are moving around, when somebody asks you, “Do you have this?” and the answer’s no, they’re gonna go somewhere else. It definitely doesn’t deter folks when you don’t have it; they’re no stranger to downloading an app and just getting access to these types of services somewhere else.

One really great analogy that I heard from a gentleman in Texas was, he said: “In banking, we’re like line chefs who are cooking the omelets for you at your resort or on your cruise or wherever you’re used to getting those omelet bars at a hotel. We have all these ingredients and all these pans, and when somebody walks up to the glass, we don’t know exactly what they’re gonna ask. It could be something pretty old like checks or telephone banking, but it could be something really modern like being able to send money on a weekend or send money internationally—’I’m closing on a house or a second property outside of the country, and I gotta move some money.'”

Being able to have all of the ingredients and all of the pans is really the name of the game. So this is just another technology shift, very similar to other technology shifts that have happened, like going from branches to online, online to mobile, including ATMs in there as well, and mobile check deposit. They’re always met with a bit of understanding, a bit of skepticism, and then eventually end up being the way that consumers choose to do banking.

I think that’s what we’re seeing right now, and why the time is now to at least form a strategy, if not start planting some seeds and getting some broad infrastructure in place. If your answer is no, you can’t accept or receive stablecoins or tokenized deposits in any way, over the next couple years you will be left behind and you will be one of the laggards. So it is time to start investigating, potentially investing, and creating the infrastructure. There’s certainly a lot of credit unions that are doing that right now, many of them Stablecore customers.

Sarah Snell Cooke: Yeah, for sure. Totally been there. Back on track here: What sort of compliance considerations should credit union executives and boards be thinking of as they’re moving forward?

Nick Elledge: Great question. I was just speaking to a board yesterday actually, and the directors—some of them are younger, one was over 90 years old—you’ve got a wide span when it comes to understanding blockchains, digital asset technology, as well as AI coming down the pike. Getting boards up to speed is really important to understand the strategic implications of what’s happening here.

I can’t cover everything on compliance obviously, but broad strokes are that the Genius Act passed last year, and I’d say that the OCC in particular is really taking the ball. Jonathan Gould—just last week I was there in the front row when he gave that speech, which was very cool—talked about how they’re actually gonna be early to passing their final rules and guidance for the Genius Act. Rather than January of 2027, they’re gonna have it ready by November of this year. So they’re gonna be ready to go, accepting applications for stablecoin issuers and other entities as of November.

Things are in fact a little bit ahead of schedule when it comes to implementation of the Genius Act. I would certainly expect that all the other regulators are really gonna carefully examine what the OCC is doing and then likely respond with their own after that. The comment period, Jonathan Gould said, was very helpful, so thank you to everyone for submitting those. That’s the timeline that we’re on; it’s ahead of schedule, it’s definitely not delayed, and it certainly is not delaying anyone I’m aware of.

Dozens of banks and many credit unions are actively investing in the infrastructure to support digital assets today. So there really isn’t a regulatory blocker. You can have members hold their digital assets if they had it somewhere else, like at Robinhood or Coinbase. You can set up accounts and have them bring that into the credit union today. You can support stablecoins today as a digital asset. Nothing’s stopping folks from doing that. I can point to a number of banks that already do that today, and credit unions that have launched or are about to launch. On the regulatory side—talking at a very high level here—I don’t think anyone’s really slowing down or waiting for individual points of clarity at this stage.

Sarah Snell Cooke: Yeah. Regulators being ahead of the game is impressive.

Nick Elledge: Yeah, absolutely.

Sarah Snell Cooke: And on the operational side as well—I read recently that stablecoins and other types of crypto can be a concern for credit unions’ asset-liability management. Can you talk a little bit about that and how that might affect credit union operations too?

Nick Elledge: Yeah, there’s a lot to unpack there. I’ll start off by saying that stablecoins and tokenized deposits don’t fluctuate in value. They are one-to-one US dollars, and that’s literally where the name “stable” in stablecoin comes from. So you don’t have to worry about large fluctuations in value or a sudden halving of the value of any of those assets.

I think that’s where the puck is going with certainly the largest banks and the largest asset managers in supporting digital assets—towards really just mirroring the current economy but putting it on blockchain. That means stablecoins and tokenized deposits are dollars or cash that are being put on blockchains. There certainly also are loans, equities, and bonds that are being put onto blockchains, although that space is a little bit earlier than the cash component.

Now, in terms of what I would call crypto or the prior generation of currencies, when you hold those as a credit union, my understanding is that they wouldn’t be reflected on your balance sheet. You’re holding them off-balance sheet for your customers, setting up a trading account effectively for them to be able to do it. You get some fee income for that, and you’re able to cement your relationship with them because of that. But if the value goes up or down, I don’t believe that really impacts your liquidity ratios as a credit union.

So that would mean that the main concern would be deposit flight. Can stablecoins and tokenized deposits move more quickly, and therefore it’s kind of hot money? But the truth is that’s the direction of travel with FedNow and RTP as well. Any real-time payment rail will allow folks to move money even on a weekend.

Now, it’s up to the credit union to set responsible limits and policies to manage that liquidity and say that you can do so much, but no more. To have all that in place when folks are out of the office at their kid’s soccer game or wherever, and make sure that you’re able to open your doors on Monday—that just comes down to responsible policy making. All of the credit unions that we work with are well aware of that, and I think it’s a pretty easy problem to solve.

Sarah Snell Cooke: So what’s the first step a credit union can take to kind of dip their toes in the water?

Nick Elledge: It’s a great question. I think that a Digital Asset Working Group is often a great way to get there. Many times we’re one of the first calls that folks make just to see a demo and see what the latest and greatest is in the space, and we’re obviously happy to take that. We’re used frequently as an educational resource. We give a lot of webinars, talks to boards, et cetera, to educate on what’s going on in the space and make sure everyone’s up to speed with an expert group, and we’re always happy to do that.

I think you have to decide between two different directions that you might wanna take: Am I trying to be more payments-oriented here? Am I interested in stablecoins and tokenized deposits, and trying to see if I can enhance my member experience through payments and accepting new payment rails? Or am I interested in actual cryptocurrency trading, and buying and selling of Bitcoin? That’s a fork in the road. We support both, but those are pretty different use cases for what you’d want to accomplish. So I’d say that’s one of the first choices: understanding your strategic goals and which of those two you are trying to go after.

Then we have a whole series of questions that you can ask after that. But I think that the space generally is moving away from the more made-up currencies or crypto, and a lot more towards cash, stablecoins, and tokenized deposits being put onto blockchains and being used to enhance the legacy payment system, which I think we’re all aware hasn’t been updated that much in the last 50 years or so.

There are definitely some improvements that can be made there, and that’s why some of the smartest people in fintech are going 200 miles an hour—making big acquisitions and big product bets that this new layer of money on blockchains through stablecoins is gonna be the future, and they’re building towards that.

As we have more AI, that integrates very well with stablecoins. Stripe just made an $8 billion AI acquisition after they made a $1 billion stablecoin acquisition, and they’re making sure those merge together. Circle, the stablecoin issuer, talks all the time about agentic commerce—AI agents where it may not even be shopping for a pair of sneakers or something, but that agent needs to pay another agent for data. Maybe they need data from the Wall Street Journal and there’s a paywall, so they have to access that. You have a lot of these types of micropayments coming in e-commerce, and stablecoin is really the native currency for that.

So more and more stablecoins are getting into circulation through these various means, as well as some of the most obvious ones like cross-border payments. Just being able to solve for member remittances, being able to move money back home or to a loved one… We have cases with students who are studying abroad trying to pay for rent over in Europe or wherever they are, and being able to move stablecoins is a great way to do that really easily and efficiently. So these are the use cases that we’re seeing, and it’s exciting to see the future developing so quickly.

Sarah Snell Cooke: Yeah. No, I remember you were talking about moving money to the Fed and whatnot. The technology that credit unions—and I assume banks as well—are using to connect with the Fed to send their money there is 50 years old. So like you were saying, it’s been a while since these things have been updated. I think it’s probably darn about time.

So I always allow my guests to have the final thoughts. What would you like to leave our credit union audience with today?

Nick Elledge: I think getting a fundamental understanding of what’s going on is a really great step here, and understanding that it’s different than AI. AI might be replacing labor and making people more efficient. What we’re talking about here is really a new payment rail, and it’s something that has tens of trillions of dollars moving today—and it’s going up—that doesn’t involve credit unions. People are coming into contact with this. People are starting to use it, and if you don’t get in the game in some way, then they find a different way to be able to do it.

It’s not necessarily that expensive to offer it and support it as a new payment rail or to have it within your credit union. But you do have to take steps, and you do have to get educated to make sure that you have the right operations and compliance in place to be able to offer an entirely new and fast-growing payment rail.

So I think that’d be a final thought: AI and tokenization or blockchains are really the two major things I think that every credit union needs to be grappling with. But they’re pretty different animals when it comes to what AI is doing, will do, and can do, versus what tokenization and blockchains do. There is certainly some intersection where a lot of the AI economy—where folks are paying for intelligence or paying models—is now happening via stablecoins. So there’s a merging of the two worlds in a certain way. Being able to invest now in the future—it’s a great time to at least be thinking about it, if not taking some more decisive action. So that’d be my closing thought.

Sarah Snell Cooke: All right. Totally agree. Thank you so much for your time today, Nick. Appreciate it.

Nick Elledge: Thank you, Sarah.