Consumer credit reporting company TransUnion will enable consumers to give crypto lenders access to their personal credit data in a move that could greatly expand the possibilities of lending in the digital asset market.
TransUnion is offering this facility through security firm Spring Labs’ ky0x digital passport, Spring Labs announced Wednesday. The credit data will be available on public blockchain networks via the passport.Cryptocurrency investors could now receive better interest rates when borrowing money thanks to lenders being able to judge their risk profile based on credit data.Furthermore, lenders could now issue loans without requiring any collateral at all depending on the customer’s creditworthiness. At present, investors must put up crypto assets such as bitcoin as collateral.Users register with the digital passport to obtain anti-money laundering and know-your-customer verification that can be attached to their digital wallets.“We believe in the growth potential of DeFi,” said Steve Chaouki, President of U.S. Markets and Consumer Interactive at TransUnion, in a statement. “Providing credit and identity data on-chain is a huge step towards improving the financial products available in the space.”The Wall Street Journal was first to report news of TransUnion’s plans. TransUnion and Spring Labs expect consumers’ credit data to be available on the passport by the end of the year, according to the report.
UPDATE (Jan. 12, 14:40 UTC): Updated with link to Spring Labs’ press release and statement from TranUnion.