CU Ledger organizers view their initial blockchain prototype as a digital identity platform built around member data held by participating credit unions, organizers said at the CUNA Technology Council Conference and CUNA Operations, Sales & Service Council Conference last week in Las Vegas.
Called a “sovereign digital identity,” the platform would give credit union members control of their identities, with credit unions serving as the centralized authenticator.
“All our identities are is data,” says Elliot Cotto, chief creative officer of Best Innovative Group, a CUNA consulting partner. “Everything about us is data, and if it’s data it can be digital.”
Best Innovation Group is working with CUNA, the Mountain West Credit Union Association, their system partners, and credit unions in developing “a proof of concept” of a private permissioned credit union shared ledger network.
Rich Meade CUNA's chief operating officer/chief of staff, says CU Ledger organizers have enlisted more than 60 credit unions of all sizes as participants. The system’s largest credit union service organizations, including CO-OP Financial Services, PSCU, CSCU, and CU Direct, have pledged their partnership as well.
“We want to remove barriers for all credit unions,” Meade says. “The more credit unions that participate, the more successful we’ll be with this project.”
Meade said the group aims to develop a working model by next spring. “This is an opportunity for us to be disrupters rather than being disrupted.”
Meade notes that other organizations within the financial services industry are also developing applications on blockchain technology. “There could be some redundancy,” he says. “But once you have a credit union network, connecting that network to other networks could really be the game-changer."
CU Ledger organizers are working with a firm called Evernym, which is building “an open-source global identity network on a permissioned distributed ledger.” Evernym’s Sovrin application will enable the ledger.
At its core, shared-ledger technology creates an online system through which two parties can securely exchange information. All networked organizations—called “nodes”—certify the exchanges.
The concept would essentially serve as the inverse of the current identity model. Rather than providing identity information to numerous organizations such as retailers, insurance firms, and government offices, credit union members would provide identity information to the Sovrin application on the credit union ledger.
Credit union members would then control which third parties could access their personal information. The centralized CU Ledger would grant permission for third parties to access information, and determine their level of access.
At a minimum, the concept solves the elusive “password problem” vendors and speakers repeatedly lamented throughout the conference.
In a much more optimistic scenario, the concept positions credit unions as true gatekeepers of their members’ identity in an increasingly digital world.
“We will truly be top of mind for the member,” Cotto says. “We will be in essence the members’ sponsor and provide their gateway into the global network.”