CO-OP Financial Services and TMG said on May 2 that they commissioned a study on blockchain to help credit unions create a framework for evaluating this emerging digital technology.
The blockchain concept, which was first developed by Bitcoin, refers to a public ledger of all executed transactions that run without a financial institution or another entity as its primary authority.
Specifically, a blockchain is a distributed database that maintains a continuously growing list of transaction records hardened against tampering and revision. It includes two types of records, transactions and blocks – transactions include the actual data stored in the blockchain, and blocks confirm exactly when and in what sequence transactions have occurred.
Proponents of blockchain technology believe it could introduce trust and transparency to any online transaction.
Mercator Advisory Group, a Maynard, Mass.-based payments consulting firm, was commissioned to conduct the study, which is expected to be completed by late summer.
Both CO-OP and TMG said they see value in blockchain technology, in addition to the transparency and security it can offer to the credit union industry.
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