Cryptocurrency has been gaining popularity in recent years and it experienced a surge in media attention mid-October 2021 as the first fund traded on the stock exchange linked to bitcoin came on the market.
Cryptocurrency is a term used to describe all types of digital currency. There are thousands of cryptocurrencies including the first and most popular: bitcoin. Bitcoin is a decentralized digital currency, which means it operates without the need for a financial institution. While it may be used like cash to purchase goods and services in limited places, it’s commonly purchased (or traded as said in the bitcoin world) as an investment. New bitcoins are created by a process called mining, which is done by supercomputers, not the average person.
It’s important to understand some risks associated with bitcoin and cryptocurrencies:
Cryptocurrency is not backed by the government, and it’s not insured.
Additionally, legislation to establish proper oversight has not been adopted by Congress. These are important reasons why Michigan Schools and Government Credit Union has not offered cryptocurrency products for our members, as we currently believe the risk is greater than the reward for our members. MSGCU is insured by the National Credit Union Administration (NCUA), which means that your money is safe. Funds up to $250,000 are insured by NCUA.
You can be out of luck when something goes wrong.
Not being insured also means you can be out of luck should your digital wallet get hacked or if you store your cryptocurrency with a third party that goes out of business. On the other hand, if your MSGCU debit card is stolen or number is compromised, there is zero liability for you. As a reminder, never share your online account password and always be on the lookout for fraudsters trying to take advantage of you (see scam alerts from MSGCU). MSGCU will never ask for your online banking username, password, or log-in verification code.
Cryptocurrency is considered volatile and high risk.
High-risk investments also come with emotional, and fiscal, highs and lows. If risky investments don't match your comfort level, consider a more conservative and insured option like a certificate of deposit.
It’s not recognized as legal tender in the US.
Not recognized as legal tender means it may be difficult to use cryptocurrency to pay for goods and services. Whether you want to pay by phone, swipe your card at the store, send money securely to friends or family, or use cold hard cash, your MSGCU accounts support your preference.
Financial advice is mostly digital when it comes to cryptocurrency.
While many thrive in an all-digital approach when it comes to financial advice, not everyone is comfortable with it and prefer a personal relationship when it comes to finances. MSGCU supports our members with many different types of financial education, from articles like this to one-on-one support.
We at Michigan Schools and Government Credit Union do not currently offer cryptocurrency products or services for members at this time. While we don’t offer cryptocurrency products today, we will continue to monitor the evolution of digital currency.
Sources:
https://www.forbes.com/advisor/investing/what-is-bitcoin/
https://www.consumer.ftc.gov/articles/what-know-about-cryptocurrency-and-scams
https://www.wsj.com/articles/crypto-ceos-to-testify-before-lawmakers-weighing-greater-regulation-11638959403
Category: Security
« Return to "Blogs"
You May Also Like
Here’s What You Need to Know About Spoofing Scams
Modern technology has enabled scammers to be sneakier and harder to spot than ever before. Here’s what you need to know about spoofing and spoofing scams.
Stay safe from scams.
Financial institutions are seeing increases in fraud. Learn to spot the warning signs to avoid falling victim from texts like these.
Avoid Student Loan Scams
Student loan interest and payments have resumed from the pandemic pause, which means scammers are back to work. Read on to learn more about common student loan scams.
Cybersecurity Practices Everyone Should Follow
Cybercrime is rampant, so take these preventive measures to keep you and your money safe.
The 12 Days Scams of Christmas
'Tis the season for scammers to take advantage of the giving spirit and holiday hustle. Read on to help prevent these 12 common holiday season scams.
Keep Your Data Safe Online
A compromised computer can put you at risk for money loss, phishing scams, or even complete identity theft. Read on for steps you can take to keep yourself safe online.
Shop Safely Online This Holiday Season
Be ready to safely shop online this holiday season with these 6 tips from MSGCU.
Stay Safe During the Holiday Season
Sometimes we let our guard down due to the stress of the holiday season and thieves may try to exploit that. Read our tips to prevent becoming a holiday victim.
Easy Ways to Prevent Identity Theft
We all know how important it is to protect our identity. Read on for tips to prevent thieves from getting information from a place you may not think about: your trash.
Six Ways to Protect Yourself Against Cyber Attacks
Learn what you can do to safeguard your money and personal information from criminals.
How Text Message Scams Typically Work
Do you know the warning signs of a text message scam? Learn how they work and what you can do to protect yourself.
Fall in Love, Not for Scams
Millions of people are looking for love, including scammers. Or, that’s what they want you to think.
Know the signs of an online romance scam so you don’t end up with a broken heart and drained bank account.
Protect Your Finances and Identity While Traveling
Taking a trip or going on vacation is exciting! As you plan what to pack and sites to see, make sure protecting your finances and your identity are on your pre-trip list. MSGCU makes it easy with these tips.
Keep safe from holiday scams
As the holiday season ramps up, keep your season cheery and bright by not falling for these holiday-related scams.
Safe Holiday Shopping for You and Your Wallet
During the holidays, you and your finances go through A LOT. Sometimes we get so caught up in what we need to buy and check off the list, we lose sight of protecting our finances and ourselves.
Let MSGCU help keep you protected while also helping you check a few more items off your list.
Use These 5 Easy Tips to Protect Yourself Online
We’re all online these days. Whether you work from home, are taking online classes, or simply enjoy scrolling through social media, keep your accounts protected and don’t let them be vulnerable. Protecting yourself online has never been more important.
To shred or not to shred?
Read these handy tips to help determine if your items are recycle-bin ready or if you should safely shred them.
Scammers are targeting teens and young adults. Learn how not to be a victim.
Young people are often preyed upon by scammers. Read on for more from MSGCU security experts to prevent you, or someone you love, from being a victim.
Scam prevention: Look out for these 7 red flags
Many Americans unfortunately fall prey to scams each year. Read on for seven common red flags from MSGCU security experts to raise your guard and help prevent you from falling victim to a scam.
Know the signs of a Spear Phishing scam
It’s important to remain vigilant to the various types of cybersecurity scams. Learn what to look for so you don’t fall victim to a spear phishing scam.
Partner with us to help protect your accounts.
In addition to MSGCU's behind-the-scenes security features, there are additional tips you can use to help keep your information safe.
7 reasons to go paperless with your bank statements
Making the switch to paperless bank statements (eStatements) gives you added convenience and security benefits, which means less worry for you. Read on for seven reasons why paperless statements may be right for you.
Holiday shopping? Pay by phone to keep safe.
Holiday shopping? Paying by phone using your mobile wallet is a smart, safe choice in the checkout line this year.
How to make your stimulus check work for you