US credit unions go with Hedera hashgraph for international payments
National credit union consortium will build its digital identity and global payments system on the Hedera hashgraph platform.
The coalition of 13 credit unions and investors, known as the CULedger credit union service organization, chose to partner with the hashgraph rather than a blockchain because of the potential to facilitate transactions at higher speeds and lower costs, among other factors.
“Equally important for us was that any distributed ledger we build on must provide stability so that we, our application developers and our credit unions can feel confident in the long-term support and community of the distributed ledger we use,” CULedger COO Rick Cranston said. “This made Hedera the only choice for us.”
Hedera has yet to launch its hashgraph, but it is already developing a governance strategy led by a diverse council of corporations and organizations spread across industries and the world.
The benefits of the hashgraph
- Reduce costs. The average cross-border payment is charged a fee of 635 basis points, compared to just 6 for payments within the US. Furthermore, the hashgraph claims its fees will be a “small fraction” of today’s typical cryptocurrency network fee.
- Increase speed. Global payments often take days to clear, while the hashgraph has been designed to operate much faster.
- Transparency. The hashgraph allows visibility into each transaction for both the sender and receiver.
- Security. The hashgraph combats fraud and the risk of default through its immutable records and smart-contract automation.
CULedger is also using the hashgraph to develop its MyCUID digital identity solution.
“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 Hedera Hashgraph CEO Mance Harmon.
Learn more about blockchain, the most popular type of distributed ledger technology, in our introductory guide, and check out how it is revolutionizing money transfers. Until blockchain or hashgraph solutions are fully developed, however, save money on global payments by comparing fees and exchange rates among the leading international money transfer providers.
Disclosure: At the time of writing, the author holds ADA and DRGN.
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