Credit Unions Seek to Become First to Market With Banking Blockchain
As Featured on Coindesk.com
The credit union industry is following the lead of hackers and thieves, according to Jeff Johnson, chief information officer at Illinois-based Baxter Credit Union (BCU).
"This is going to sound strange," he said. "[But] criminals, no matter how much you hate them, are really smart people. They take the path of least resistance."
In his mind, if it’s working for international payments on the black market, there has to be a way to leverage the technology for above-board use that is just as robust, anonymous and secure.
It's one of the reasons BCU has joined 55 other credit unions and four of the largest credit union service organizations (CUSOs) on the CU Ledger blockchain project, led by the Credit Union National Association (CUNA) and Mountain West Credit Union Association (MWCUA).
The ongoing effort, those involved say, is similar to work being conducted at major consortium projects launched by big banks. For example, R3CEV has attracted more than 40 traditional financial institutions for trials that have focused on applying the tech to commercial paper and trade finance.
But while R3 has garnered more attention, CU Ledger believes it has a better chance of pushing technology through to commercial production first, due to the cooperative nature of credit unions.
"The two basic [blockchain] concepts are scale and security, and we've together credit unions representing enough members so that when we get this going we should be able to scale quickly," said Rich Meade, chief of staff and chief operating officer at CUNA.