In an effort to build a cross-border global payments platform for millions of credit union members, CULedger has partnered with Hedera Hashgraph to utilize its hashgraph and public ledger solutions.
“Currently, cross-border payments are painful for all parties involved,” said CU Ledger COO Rick Cranston. “They take time, they’re expensive and there is limited visibility into the transaction.”
Hedera Hashgraph, he explained, is faster, providing “visibility between the two parties” at a significantly lower cost.
“It also eliminates concerns regarding fraud and default, since transactions are recorded immutably on the public ledger and manual processes, since transactions are automated via smart contracts,” added Cranston.
Formerly CUBlockchain, the Denver-based CULedger is a credit union consortium supported by CUNA and the Mountain West Credit Union Association. The Hedera platform will be used in conjunction with
“We have a goal of 1 million users by the end of 2018, and we will do that through pilot programs,” said Esser, adding that all participants will be CU members.
Currently, 16 of the top 100 credit unions (by asset size) have signed on and have invested, and that figure includes roughly a quarter of the nation’s 25 largest credit unions. For privacy reasons, the institutions’ names were not made available.
Global payments race
According to the McKinsey report, “Global Payments 2017,” the global payments industry accounted for 34 percent of overall banking revenues, which is up from 27 percent from 2012.
“For the next five years, annual growth will average seven percent, making payments a $2 trillion industry by 2020,” the report stated.
Prior to partnering with the Dallas-based Hedera,
“CULedger continues to lead the financial services industry in innovative ways to apply distributed ledger technologies to the huge challenges that financial services firms and individuals face in making timely, secure, cost-efficient payments, be they across the country or around the world,” said Mance Harmon, CEO of Hedera Hashgraph.
Harmon explained that developers can build “secure, fair, lightning fast distributed applications” on top of the Hedera hashgraph platform. The platform will be governed by up to 39 “renowned enterprises and organizations,” across multiple industries and geographies known as the Hedera Hashgraph Council (HHC). The licensing and governance model was designed to protect the community by “eliminating the risk of splitting, guaranteeing the integrity of the codebase” and providing open access to the protected core.
“We are pleased they [CULedger] are choosing to expand their capabilities being built on top of hashgraph, and look forward to working with the team to enable more efficient global commerce, by reducing the costs and complexity associated with global payments,” he added.
Esser said there are still kinks to be worked out, but when the platform is launched in early 2019, the goal is to expedite the
“We want to have this in as many credit unions and members hands as possible. We are looking at ways to make this low-cost to no-cost for the credit unions,” said Esser. “And if credit unions are interested in investing, that is certainly [still] an option.”
