US Credit Unions Will Use DLT to Expand Payments Business

CULedger – the credit union services firm that grew out of a blockchain-focused consortium effort – is partnering with DLT startup Hedera to build a public system for cross-border payments.

Unveiled Tuesday, the deal will see the two firms collaborate on a public network based on Hashgraph, a kind of distributed ledger technology (DLT) created by the software company Swirlds. CULedger had previously said that it would work with the private version of Hashgraph as a way to connect the group of credit unions backing the blockchain effort.

Indeed, the latest development signifies that CULedger, which has been a focal point for work around the tech within the U.S. credit union industry, is looking to expand the kinds of services it seeks to offer. The Hedera Hashgraph will be paired with a new global identity solution, MyCUID, in an effort to build what CULedger calls "a comprehensive system" for identity and global payments.

Rick Cranston, COO of CULedger, explained that the current system for facilitating cross-border payments is a "painful" process for parties involved, due to its high costs, limited visibility into transactions and the time involved in actually getting money from one point to another.

He went on to say:

"Hashgraph is fast and it provides 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."

Members of the CULedger consortium formally created the credit union services organization (CUSO) in mid-2017, as previously reported.

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