Credit Union Associations are not satisfied sitting on the sidelines while the R3 Banks have all the distributed ledger fun. CULedger is creating a consortium of credit unions with the intention of exploring blockchain and distributed ledgers technologies. [via Bitcoin.com]
Formerly known as CUBlockchain, the name change comes with an announcement that the group is seeking participants and funding. Following in the footsteps of the R3 group, CULedger is developing Premissioned Distributed Ledger technology. Permissioned DLTs are something between traditional, centralized ledgers and a true permissionless, decentralized ledger like the Bitcoin blockchain.
Individual Credit Unions will hold and share their Distributed ledger and act as nodes in the system. This could reduce costs for the credit union, lowering costs for financial transactions between institutions. Customers will ideally see the benefit in the form of lower fees and quicker transactions. This could make remittance much cheaper than traditional methods.
However, individual users will not be able to view or contribute to the ledger. Only member credit unions will be able to run a node and submit transactions.
Currently the partnership includes The Credit Union National Association (CUNA), The Mountain West Credit Union Group, and Best Innovation Group, Inc. Membership for the site is free. Credit unions will need to contribute between $1,000 and $10,000 to participate in the network.
On its website, CULedger makes it very clear that what they are creating is not a digital currency, or even a blockchain.
“In our view, the most exciting innovation (and most relevant to [Financial Institutions]) is happening in the field of “permissioned” DLT, which is fundamentally different than permissionless/proof-of-work blockchains. […] It is clear to us (and to R3, Ripple, and many others) that permissioned DLT will be the future for financial institutions, and for digital identity, and we’re excited to help Credit Unions take full advantage of the exciting opportunities this technology brings.”
Cryptocurrency advocates may balk at that notion, but more financial institutions are trending that way. But it may not be an either/or prospect. It is possible that our future financial world will include both permissioned DLTs and decentralized, permissionless ledgers like the Bitcoin blockchain.
CULedger is also working on a universal identification system using permissioned DLTs called Sovrin.
We will keep an eye on CULedger and report significant news as it happens.