August saw the first meeting of US credit unions looking to pioneer so-called distributed ledger technology (DLT) in CULedger, a “dedicated” version of the banks’ R3 Consortium.

CULedger ‘Does What R3 Is Doing for Banks’

CULedger, which seeks to mimic R3 in order to allow organizations to benefit from blockchain technology, is currently fundraising among credit unions and credit union service organizations (CUSOs).

Already involved are Cuna, Best Innovation Group, the Mountain West Credit Union Association and PSCU, among others, Finextra reports.

“It is an effort to do for the credit union industry what R3 is doing for the banks,” the participants said in a joint statement.

According to their plans, the goal will be to “assemble a consortia of credit unions and CUSOs to build a ledger network dedicated the needs of credit unions,” closely following the R3 roadmap being worked on by global banks.

The remit for the eventual application of DLT, which is the phrase often applied to blockchain technology in traditional financial circles, is equally broad.

“It may function as an asset custodian, improve record keeping, support remittance and settlement functions, and even automate contracts,” said George Peabody of Glenbrook Partners, a research firm that previously collaborated with PSCU on a blockchain whitepaper.

“While these are early days in blockchain technology development, the emerging applications based on this new approach could alter how assets of many kinds are transferred and tracked. It’s time to pay attention.”

More of the Same?

Talk of blockchain’s usage among legacy institutions in this style has previously been met with skepticism from cryptocurrency circles. Notably, while championing the virtues of streamlining current processes, the literature tellingly omits terms such as “decentralized.” Some believe such exclusions will lead to the actual removal of blockchain’s fundamental qualities from these projects’ final products.

An article on CUTimes, reproduced on CULedger’s dedicated news portal in August, referred to the project as a “permissioned, distributed, shared ledger platform.”

Nonetheless, comments surrounding CULedger’s progress point to a desire to create a targeted product, allowing another industry to keep up with current trends.

“The collaborative effort of the credit unions, industry advocates and partners involved in the CULedger initiative represents the most appropriate approach to achieving greater efficiencies in areas that are central to credit unions’ core business interests,” PSCU CEO Chuck Fagan stated.

Once ready, the technology will be open to credit unions of all asset classes.