A leading US credit union says it has tasked IBM with creating a permissioned blockchain system that will let customers access shared financial services and conduct transactions among any credit union on the network.
A collaboration between Denver-based CULedger, a credit union service organisation, and big blue will see a Hyperledger-based system used to create an unchangeable audit trail and support shared services.
Using the system, unions will be able to perform identification authentication, regulatory compliance, payments and lending actions that are all recorded on the blockchain, allowing other unions to quickly verify customers’ accounts.
Marie Wieck, General Manager, IBM Blockchain commented in a release: “Credit unions will be able to cooperate and receive shared value from quickly exchanging sensitive data in a permissioned, individually controlled and transparent way. This decentralized approach using blockchain helps put the customer in control of their own identity”
Credit Union Blockchain Technology Aims at Cooperation
In order facilitate access to the new services CULedger has created MyCUID, a digital credential system that allows credit unions to share financial services and allow their members to conduct a transaction with other unions connected to the network.
This adheres to the privacy-by-design requirements of self-sovereign identity supported by the Sovrin Foundation, IBM noted. MyCUID will help credit union members to conduct transactions among any credit union on the network.
John Ainsworth, CEO and President, CULedger commented in a release: “A cooperative model that helps improve the member experience while benefitting all credit unions is the ideal approach to ensuring the next wave of financial innovation for the credit union industry.”
“We are creating a network through which all members can join and access new services and enabling credit unions to become even more competitive while addressing new market dynamics where members are demanding even more for their financial services provider.”
CULedger expects its blockchain offering for credit unions should be made available before the end of 2019.
The credit union industry serves more than 260 million members worldwide with over $1.7 trillion of circulating assets and is historically known for superior customer service. The adoption of blockchain technology will help build continued momentum among all demographics, as well as small and medium enterprises that currently lack access to financial services.
The blockchain technology been used by IBM is not reliant on cryptocurrency as the system is built on the Linux Foundation’s Hyperledger Fabric which is the first blockchain system that runs distributed applications written in standard, general-purpose programming languages, (e.g., Go, Java, Node.js), without a systemic dependency on a native cryptocurrency.