Mountain America Credit Union thinks Defi in Utah could be the next big thing – Utah Business
In the early 2000s, my wife and I traveled through Sichuan Province in China to Lhasa, Tibet. Many Chinese towns and villages were being torn down and rebuilt, and we wanted to see them before much of their history was lost. During our travels, we have dealt with vendors using abacus on the streets or in train stations. They flicked through the abacus at lightning speed and showed us the resulting prize. I admit it, we had no idea how to read an abacus, so we just nodded and handed them the number of paper bills we thought approximated the value of what we were buying . It usually worked very well.
Those who have used cryptocurrencies or other digital assets like NFTs can probably relate to my thoughts on the abacus. Usually this works just fine, except when it doesn’t. And when it’s not, there can be a lot at stake! Unlike the abacus, the technology behind digital assets enables new innovations that are important to local communities and individuals. However, these innovations shouldn’t require the user to learn to understand something that seems as abstract as the abacus did to me – it should feel familiar and secure.
I confess that I am a technologist by profession, so naturally I became interested in Bitcoin when it was released in 2009. But it was not until late 2017 or early 2018 that I really got into it completely by installing solar panels in my home and by mining a cryptocurrency called Zcash. In 2018, I co-developed a blockchain patent with a colleague, and in late 2020 I realized that blockchain technology was developing into an important solution that could empower individuals and communities.
Around this time, blockchain technology began to evolve from a means of digital currency transaction to a valuable tool for storing information, managing personal identities, coordinating large communities, and representing and exchanging real-world assets, among many many other uses. These advancements have allowed the individual or community who developed the underlying protocol to retain full control over the information. It felt like the wondrous, madcap chaos and discovery that marked the rise of the internet in the mid-90s, without the corporate capitalism of today.
Fast forward to 2022, and user experience remains a major issue. More so, it is clear that traditional finance (TradFi) and decentralized finance (DeFi) need to interact – there is too much confusion and it impacts users. That’s why the Mountain America Credit Union leadership team authored a white paper on how credit unions, trusted community institutions that embody the cooperative values of DeFi but are still part of the TradFi ecosystem, can serve both financial models. Through this lens, the following spectrum of services appears:
Significant innovations are happening with cryptocurrencies, decentralized information storage, self-sovereign identities, and much more in the decentralized finance space. Moreover, governance in the same space has settled into the time-tested cooperative model. This model is advantageous because it is owned and operated by its members, with all profits used for their benefit. Credit unions, including Mountain America, are cooperatives that work hard to represent the needs of their communities.
Traditional finance has remained largely the same for centuries. It is profit driven and can sometimes feel like it was made by and for the wealthy. Credit unions provide the financial services their members need, which are usually rooted in the traditional financial system, and help their members enjoy meaningful benefits.
Our central question is: what if a credit union could fix the abacus-like user experience of DeFi and help its members safely participate in decentralized financial activities? As a co-op, Mountain America could be a community-based financial institution that allows members to opt into the best decentralized finance protocols so they can easily jump between the tried-and-true rails of the traditional financial system.
It is evident that Mountain America members are increasingly using decentralized finance. Also, the number of questions and comments the credit union receives from members on digital assets that represent a wide range of opinions. Because Mountain America exists to serve its members, we are exploring a variety of opportunities that fit within today’s regulatory constraints to identify how the credit union can help members safely participate in TradFi and DeFi. . If Mountain America can be the bridge between these models, it can focus on improving the user experience in a unique way. As a not-for-profit organization, it can be trusted to reflect the values and behaviors of its members in the way it delivers these services.
As an avenue of exploration, Mountain America sponsored Cryptopia, a Utah-based Web3 conference focused on all things blockchain, including decentralized finance. The conference is the start of a listening tour for Mountain America to gather feedback and determine next steps. Mountain America also reaches out to community, state, and federal stakeholders to encourage responsible regulation and development that protects all parties, including those who innovate. If you are a Mountain America member, please get involved in member governance and provide us with your feedback and thoughts. If you are not a member, we always welcome your feedback. Together, we can move forward responsibly in a way that benefits everyone.