The Problem: Deposit Flight Kills Credit Union Growth
Jane has $340,000 in her credit union savings account. She needs $200,000 for an investment property down payment. Her credit union, with $180 million in assets, cannot offer a pledged-asset loan against her holdings because they lack the infrastructure.
She moves the money to a private bank. The credit union loses the deposit, the lending relationship, and the member relationship. This happens 4.7 million times per year across the credit union system.
Deposit flight costs credit unions $84 billion annually. The money leaves not because members want to leave, but because their institutions cannot serve their liquidity needs.
Why This Happens
Credit unions operate on isolated balance sheets. A credit union in Seattle with excess deposits cannot efficiently lend that capital to a credit union in Austin with lending demand. The correspondent banking system exists, but it's slow, expensive, and designed for different purposes.
Federal Home Loan Bank advances work for mortgage lending. They don't work for pledged-asset lending against alternative collateral.
Corporate credit unions provide some liquidity services, but settlement takes days. Members who need capital for a time-sensitive opportunity cannot wait.
The infrastructure gap is simple: credit unions have no mechanism for instant, atomic settlement of inter-institution liquidity.
The Aaim Cooperative Reserve Token (AAIM)
AAIM is a fungible, yield-bearing utility token that maintains 1:1 parity with U.S. dollars. It operates exclusively on the Aaim Blockchain, a permissioned distributed ledger restricted to vetted financial institutions.
How it works:
When Pacific Northwest CU deposits $10 million into the network liquidity pool, $10 million in AAIM tokens are minted. When they redeem, the tokens are burned. 100% collateralization, always.
When First Texas CU needs $2 million for member lending, they borrow from the pool. Interest payments flow automatically to AAIM holders via smart contract. No manual reconciliation. No correspondent banking delays.
Settlement is instant and atomic. The transaction either completes fully or doesn't happen at all. No settlement risk. No counterparty exposure beyond the collateralized pool.
The Cooperative Flywheel
Surplus-capital institutions deposit funds and generate yield superior to traditional correspondent banking. Deficit-capital institutions access funding without external markets at competitive rates.
The more credit unions participate, the deeper the liquidity pool. Deeper liquidity means tighter spreads. Tighter spreads attract more participants.
This is not a new concept. It's how interbank lending has worked for a century. The innovation is bringing that efficiency to credit unions with modern infrastructure.
Governance and Compliance
The network operates under council-based governance. Voting power correlates with assets under management and network participation. Protocol modifications require on-chain proposals and supermajority approval.
Every participant undergoes full KYC/AML verification. Transaction history is immutable and audit-ready. Third-party security audits validate smart contract integrity. Qualified custodians hold underlying collateral.
The regulatory posture is conservative by design. AAIM is a utility token for settlement, not a security. No speculative trading. No secondary market. No retail access.
What This Enables
Credit unions that participate in the Cooperative Liquidity Network can:
- Offer pledged-asset lending against member holdings without external funding
- Access competitive yields on excess deposits
- Settle inter-institution transactions instantly
- Share infrastructure costs across the network
- Retain members who would otherwise leave for liquidity elsewhere
The $84 billion deposit flight problem exists because credit unions lack infrastructure. AAIM provides the infrastructure.
Current Status
The Cooperative Reserve Token is in development. The proposal is available at aaim.com/reserve. Credit unions interested in early participation can contact partnerships@aaim.com.
This case study describes planned functionality. Implementation details may change based on regulatory guidance and technical requirements.