Credit unions are set to get a seat at the table of one of the world’s largest blockchain organizations, as the National Association of Federally-Insured Credit Unions has been invited to join Hyperledger.
Hosted by Linux, Hyperledger is an open-source, international consortium working on distributed ledger and related technologies, and how these new tools can improve a variety of businesses and industries. NAFCU will be the first financial industry trade association to join the likes of Cisco, Intel, SAP, American Express, IBM, Samsung and other global giants.
“Credit unions have been dipping a toe into blockchain, but now this new partnership is going to really bring it to a whole other level,” NAFCU President and CEO Dan Berger told Credit Union Journal. “We’ve been following this issue for a while. Three or four years ago, you had thousands of start-ups talking about blockchain, but we wanted to make sure there was a true user case for this, and there was. So then it was a matter of seeing who are the major players shaking out, and Hyperledger is easily the biggest one out there. We reached out to them and told them about the credit union industry, and they invited us to join.”
Although Hyperledger boasts a number of large banks on its rolls, including the likes of JPMorgan Chase, NAFCU is the first financial trade association to be invited in. “Things like this work better the more participants you have,” Berger said, noting that NAFCU’s growing membership offers Hyperledger a significant entrée into the credit union industry.
But the other thing the trade group brings to the Hyperledger table is its Washington connections. “Our history of advocacy and our relationships in D.C.” are a real asset to Hyperledger, he said.
“Hyperledger has experienced tremendous growth and development over the past two years, and we are excited to welcome NAFCU as our first financial trade association member,” Hyperledger Executive Director Brian Behlendorf said in a statement. “We look forward to NAFCU contributing to our vibrant, active Hyperledger community, and providing valuable insight to the credit union industry and how our technology can improve the way financial institutions communicate with one another.”
‘A seat at the table’
Berger said NAFCU plans to host a meeting for credit unions and other financial institutions to learn more about blockchain, cryptocurrency and other related technologies, and Hyperledger plans to hold webcasts in partnership with NAFCU to reach even more credit unions, as well.
“When there are organizations out there spending hundreds of millions of dollars on something like this, investing that kind of money in a technology that can help credit union save money, drive efficiencies and economies of scale, you want a seat at the table,” Berger said. “And you want a seat at the table with the largest organization out there. Ultimately, we’re hoping blockchain will offer credit unions quicker settlements, help them save money on the back office, contracts and more. This partnership will help credit unions be part of the development of blockchain.”
Though credit unions have been exploring blockchain’s potential — most notably the CU Ledger group — Berger said NAFCU’s engagement with Hyperledger is a major step forward for the industry.
“CU Leger is a good group of folks, and we strongly support their efforts,” he said. “But this represents the potential for credit unions to be part of an effort being driven by some of the largest, most diverse global companies.”