DDecentralized finance (or DeFi) was originally meant to cut out the middleman like a bank or credit union, but Mountain America Credit Union wants in.
“Some may fear that the goal of DeFi is to end the traditional reliance on a central financial operations hub,” reads the recent Mountain America whitepaper. But Mountain America Credit Union (MACU) management sees an opportunity in the changing world of finance.
“Credit Union = The OG DAO.” This is what MACU printed on shirts that were donated to Utah Cryptopy an event. For context, DAO stands for Decentralized Autonomous Organization. It’s an organizational setup that, when done right, means that decisions are made by a community of members, not a central leadership group.
Credit unions offer similar services to banks, but are non-profit organizations owned by members who use their services.
“A DAO done right is a group of people who are treated equally – it’s decentralized in the sense that everyone has equal voting power, and they are then able to influence, drive and manage the ‘entity they are part of,’ MACU CTO Marcus Daley says.
Credit unions, Daley adds, were originally developed as a way to provide financial services to people who would not otherwise have the financial means to access those services. When people pooled their capital in a group, they could gain some financial power.
“They were treated as equal members of the cooperative,” he says. “And in the spirit of a DAO, that’s really what a DAO is.”
In Daley’s opinion, there are only two main differences between a credit union and a DAO. The first is that voting in a credit union happens analogously, with paper contracts as opposed to smart contracts. The other thing is that there are laws that require a credit union to act in a certain type of way. Other than that, the two structures are very similar.
With that in mind, what is a credit union like Mountain America doing with cryptocurrency?
The Utah-based credit union has 102 locations in six states, including 72 in Utah. It has over a million members on its website. Of the members Daley has encountered, most want some sort of third-party middleman when dealing with cryptocurrency, and that’s probably not an anomaly.
According to a NYDIG survey, about 22% of Americans own Bitcoin. Of those people, 80% would store it with a bank or credit union if given the option, and 71% of holders would switch to a bank or credit union if it supported Bitcoin.
Daley encourages people to go ahead without a third party if they feel comfortable with the current non-custodial user experience of cryptocurrency, which often includes the use of a hardware wallet and the storage of cryptocurrency on a jump drive. But for those who aren’t comfortable navigating this world, credit unions like Mountain America might be able to provide support.
“Today we don’t do anything in crypto, but since many aspects of how we operate are very similar to crypto, we find that a lot of people are very excited to be able to keep with us and then have the ability to go out on their own when they need to,” Daley explains.