SEATTLE — CUNA, in partnership with the Mountain West CreditUnion Association, is looking for a few good credit unions — 125 tobe exact — to participate in the industry's first ever developmentof a blockchain technology platform.

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During the final general session Wednesday at the national tradeassociation's America's Credit Union Conference at the WashingtonState Convention Center, CUNA's Chief Operating Officer Rich Meadeintroduced the CU Ledger Initiative, a proof-of-conceptproject.

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The concept is to create a credit union system-wide permissioneddistributed shared ledger, more commonly referred to as blockchain technology platform, which has the potential tosubstantially improve the speed, efficiency and security of alltypes of financial transactions. The permissioned distributedshared ledger system would only include credit unions andCUSOs.

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Meade said he has verbal commitments from the $1.7 billion RoyalCredit Union in Eau Claire, Wis., the $2.1 billion Chartway CreditUnion in Virginia Beach, Va., and the $1.6 billion AmericanHeritage Federal Credit Union in Philadelphia.

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Three CUSOs, CO-OP Financial Services, PSCU and CUDL, have alsoverbally committed to the project, he said.

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In May, CO-OP and TMG announced they commissioned a study on blockchainto help credit unions create a framework for evaluating thisemerging digital technology. Mercator Advisory Group, a Maynard,Mass.-based payments consulting firm, was commissioned to conductthe study, which is expected to be completed by late summer.

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To participate in the CU Ledger Initiative, credit unions willbe asked to each make a $10,000 contribution to offset the costs ofthe research.

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“This is why we are doing the proof of concept first,” Meadesaid. “We don't know whether or not credit unions will jump onthis. We don't know if they want to be innovators on this. We hopethey are. But we don't know they will be.”

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Although Meade said 125 credit unions are needed to fund theproject, he would like to see more than double that number ofcredit unions on the blockchain technology system to fully test and evaluate it.

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Meade said the project is open to credit unions of all assetsizes.

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CUNA plans to hold a webinar at the end of July for members thatwill explain the project in more detail.

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Credit unions and their members would benefitin a number of ways from a dedicated shared-ledger platform, hesaid. Chief among them include participation in a credit unionindustry-specific payments system that would not be dependent onothers and the enhanced security of data for possible financial andidentify applications.

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“This potential platform could be the next generation of theshared branching network,” Meade said. “This is not a singular stepthis is a leap into the future. This could be a game changer.”

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A distributed ledger is a digital record of ownership that doesnot include a central administrator or central location for storeddata. Asset owners use cryptographic signatures to debit and creditaccounts, which makes distributed ledgers unforgeable.

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The blockchain concept, which was first developed by Bitcoin, isa public ledger of all executed transactions that runs without afinancial institution or another entity as its primary authority.Proponents of blockchain technology believe it could introducetrust and transparency to any onlinetransaction.

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The CUNA/Mountain West Credit Union Association project,however, would not involve Bitcoin transactions.

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Meade said the Mountain West association spearheaded thisproject after a presentation about blockchain technologyapplications was made earlier this year by John Best, CEO of theBest Innovation Group in Colorado Springs and a CUNA consultingpartner.

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