Increased efficiency, security, and speed. These are the primary benefits credit unions could realize by coming together to develop a network based on blockchain, or shared-ledger technology.
Rich Meade, CUNA chief of staff/chief operating officer, presented the possibilities that shared-ledger technology could create for credit unions at America’s Credit Union Conference, which concluded Wednesday in Seattle. He also introduced a new initiative CUNA will undertake with the Mountain West Credit Union Association to position the credit union movement for the day that blockchain hits the mainstream.
“This isn’t just some new website, this isn’t a new app. This really is a game changer if we can make it work for credit unions,” Meade said.
At its core, shared-ledger technology creates an online system through which two parties can securely exchange information with those exchanges certified by all the organizations--called nodes--participating in the network using the technology.
It’s complex, Meade said, and takes some study to understand, but with the big banks heavily investing in it already, it’s clear that blockchain will only continue to gain traction and that credit unions need to be ready.
“This solution is coming, this is the next generation of technology,” Meade said. “I think we want to own this and do it our own way rather than fall behind or chase behind somebody else.”
That’s why, in the coming months, CUNA, the Mountain West Credit Union Association, and other system stakeholders will begin developing the CULedger Initiative, a concept to create a distributed-ledger network for credit unions.
The goals for the project will be to remove barriers to entry for all credit unions; normalize the platform before its introduction; create interoperability among credit unions regardless of cores, third party products, or platforms; and quick adoption.
Meade directed attendees to the website, culedger.com. He also asked for engagement from credit unions, including an invitation to become a test “node” for the shared-ledger network, and invited attendees to a membership webinar on the project next month.
“We were the original peer-to-peer lenders, can’t we be the original peer-to-peer shared-ledger network? I think we can,” Meade said, adding, “You’ve done it before, I know we can collaborate and cooperate on this project.”
For comprehensive coverage from the CUNA America's Credit Union Conference, visit news.cuna.org.