Also read “Will Blockchain Help CUs? Part 1”
Will blockchain, until now known primarily as the technology platform on which cryptocurrencies like bitcoin are traded, turn out be useful for traditional financial institutions? The nation’s biggest banks and a group of savvy CUs think it might and are spending hard dollars to investigate. Others think it’s a fool’s chase.
“There’s plenty of interest, but also plenty of skepticism,” notes Rich Meade, chief operating officer and chief of staff of the Credit Union National Association, Washington, D.C. He’s actively involved in CU Ledger, a cooperative project among CUs to prove whether it will have practical value for them.
Interest in blockchain may be growing, but it’s also shrinking in some quarters. $400 million Nutmeg State Financial Credit Union, Rocky Hill, Conn., joined CU Ledger project initially but then dropped out, reports Jeff Levesque, EVP/chief operations officer. “We believe in centralizing control of our ledgers, and we came to see that blockchain would be a decentralizing step, so we’re now focusing on internal handling of payments and ledger posting. We’re building a modern core with open architecture that is compatible with open APIs (application programming interfaces) that will let us communicate securely outside our firewall with other financial institutions and payments networks.”
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