Digital assets are no longer the future; recently becoming an important voting bloc, they aren’t just here to stay, they may determine the outcome of this year’s presidential election. With an estimated 40% of all adults in the U.S. owning crypto, it’s time for financial institutions and regulators to face the facts – all two trillion ($2T) of them and counting. At DaLand CUSO, we’ve never been ones to shy away from data: if you don’t yet have a meaningful strategy to incorporate digital assets into your custody and onto your balance sheet, to incorporate this new form of money-data into your banking business, you're already behind.
Cryptocurrencies and blockchain aren't just for tech enthusiasts. Earlier this year Bitcoin secured an historic position by fueling the most successful ETF launch of all time. With institutional adoption reaching new highs, the United States government is exploring ways to hedge its bets; “As families struggle to keep up with soaring inflation rates and our national debt reaches new and unprecedented heights, it is time for us to take bold steps to create a brighter future for generations to come by creating a strategic Bitcoin reserve,” says Senator Cynthia Lummis. Digital assets are revolutionizing the way we think about and handle money. The benefits are clear: decentralized issuance, lightning-fast transaction speeds, enhanced transparency, low costs, and broader financial inclusion at a global level. These benefits come with many regulatory, compliance, and security challenges which local community cooperatives are uniquely positioned to overcome.
We’re calling on the credit union movement and the broader financial services industry to stop dragging their feet. Embrace these technologies and build relevant, valuable financial products or risk becoming the next Blockbuster Video in a Netflix era (or the record store operators at the advent of the iPod and iTunes).
DaLand’s revolutionary C.O.D.E. (Core Optimized Digital Experience) Engine empowers farsighted and courageous leaders to integrate digital assets into their product offerings and onto their balance sheets, elegantly anticipating and insulating for regulatory and insurance requirements, proving that traditional financial institutions can (and must!) lead in this new era. The future of finance is here – let's not be left behind. From education to implementation, the DaLand team can guide any financial institution to a strategically relevant position of being plugged into the future of money (in as little as 6 months).
A Case Study: St. Cloud Financial Credit Union and the CU Digital Asset Vault
We had the privilege of collaborating with St. Cloud Financial Credit Union to bring a revolutionary product to their members: the CU Digital Asset Vault. This cutting-edge credit union product is designed to provide unparalleled security, convenience, and peace of mind to St. Cloud’s members in managing their digital assets.
Key Benefits of CU Digital Asset Vault:
Enhances ROI: Your institution has already made massive investments into your core processor, this ensures this new money-data is incorporated at the core of your banking operations (capital and relationship stay within your organization, as opposed to outsourced to neobanks and external wallets looking to profit from relationship and value you’ve built in your local community).
· Enhanced Security: The vault boasts 2FA/MAA (Multiple Approver Authentication), CU defined withdrawal limits, CU defined time-delayed withdrawals, private key bifurcation, encrypted redundant data storage, and native integration to modern CU banking cores.
· Convenience: CU staff can create vaults on multiple blockchains on-demand; members can access and manage their digital assets anytime, anywhere without using clunky hardware keys and without trusting internationally headquartered, centralized exchanges.
· Peace of Mind: Members can rest easy knowing that their assets are protected by St. Cloud Financial Credit Union - an institution which has been protecting the fruits of their members’ labor for over ninety years!
· Positions your FI for the Future: Catalyze the creation of revenue generating product offerings in the digital asset space, emerging payments products offerings (to replace waning interchange income and decreasing cards/NSF margins), non-interest income offerings, and expanded lending offerings.
· Insulates Your Institution: Protect your credit union against the unknowns of digital money transformation, innovation, and disruption impacting banking, finance, Wall Street, and Washington D.C.
Through extensive member surveys in 2022 and 2023, the credit union found that 1 in 5 of its members (consistent with the national average) were already using some form of digital asset or was likely to do so within 12 months or less. Despite their own executives’ experience in the digital asset space, this percentage was larger than expected, leading to the team’s decision to ensure all aspects of their members’ needs are being met – not just the common ones.
Now, whether members are seasoned digital asset investors or just starting their journey, the credit union’s CU Digital Asset Vault serves as the ultimate companion for navigating the world of digital assets securely and seamlessly. St. Cloud will be the first credit union in the country to offer a core-integrated, regulatory compliant, sustainable solution to their members in this growing digital space.
Our Collaboration with St. Cloud Financial Credit Union
The collaboration process involved several key steps:
1. Digital Asset Seminars: Our journey started when the executives at St. Cloud became interested in providing digital asset services to their members but didn’t know where to start. DaLand’s early adopters and experts in the digital asset space were brought in to provide in-depth, practicable education to the St. Cloud team.
2. Needs Assessment: DaLand and St. Cloud spent many hours discussing the digital asset space, the evolution of ‘money’ itself, and the results from thousands of member’s survey responses. We came to clearly understand their members' needs and the specific education and security challenges they face in managing digital assets.
3. Development and Integration: Our team at DaLand CUSO developed, tested, documented, and third-party audited CODE Engine Coin2Core - the underlying technology for St. Cloud’s CU Digital Asset Vault. We ensured it met the highest standards of security and usability, then integrated this product seamlessly into St. Cloud Financial Credit Union's modern banking core.
4. Launch and Support: Our organizations agreed to carefully roll out this product in soft-launch phases, which will culminate in a full go-live later in Q3. As we approach a full-scale product launch to tens of thousands of members, our focus has been on providing comprehensive training and support to ensure a smooth rollout and adoption by members.
Imagine being able to empower your member service reps, giving them the ability to pull up a member’s Bitcoin, US Dollar Coin, Ethereum, or other digital assets balances as part of the person’s relationship profile with your institution. Consider the low-risk revenues and margins possible by monetizing member digital assets within your local economy, using new money data s fuel for economic stimulation by positioning your lenders easily, conveniently, and automatically use digital asset data within your core as collateral. Contemplate the possibilities for non-interest income and revenue stream recapture if your members could simply open their online/mobile banking and pay merchants using digital asset balances (and your FI reaps the benefit for that transaction being direct to core and not sent down costly, risky, fraud-prone legacy payments rails and bill pay channels). Talk to your CFO about the boost to your balance sheet and capital position if you could conduct a campaign to recapture deposit outflows to digital asset exchanges which have plagued banks the past 3 years.
Via our partnership with St. Cloud, DaLand has used CODE Engine and our knowledge/passion for modern core data processing to prove these are not only ideas; they’re inevitabilities and present realities!
This project demonstrates that by embracing digital assets and partnering with innovative fintech partners, traditional financial institutions can indeed lead the way in the new era of finance. The CU Digital Asset Vault is more than a product; it's a testament to what’s possible when we combine deep macroeconomic expertise, forward-thinking strategy, and cutting-edge technology with the simple philosophy of ensuring community financial institutions control the data essential for their long-term success and relevance.
The future of finance is here, and DaLand partners won’t be left behind. We’re committed to pushing the boundaries and setting new standards for the industry and we challenge all the noble leaders of community financial cooperatives to join us in this journey towards a more innovative, inclusive, and robust financial ecosystem.
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