- TransUnion, one of the three largest credit bureaus in the United States, announced that it will offer credit scores for crypto loans.
- This service is provided thanks to TransUnion’s partnership with data security firm Spring Labs, and DeFi identity and compliance software developer Quadrata.
Millions of people, for different reasons, are outside the international banking system. They do not have accounts or cards, much less are they able to access loans or some kind of facility to progress. Cryptocurrencies, and more precisely DeFi (decentralized finance) arrived to change it.
The digital field allows, With the support of their own funds, users take credits without being subjected to an infinity of questions. This, which at another time has seemed so complicated, currently works and is well accepted. To make the space even more interesting, credit bureau TransUnion announced that it will offer credit scores for crypto loans.
The arrival in the blockchain universe of this giant that is listed on the stock market and has been working in the field since 1968 is from the beginning of theLinks generated with data security firm Spring Labs, in which he is an investor, plus DeFi identity and compliance software developer Quadrata.
In October, TransUnion and Spring Labs had launched the program called TrueZero. This service, which served as the first test, allows financial institutions to send information, such as credit data, without revealing valuable information.
DeFi-based crypto lending
Which is one of the three most important credit bureaus in the United States cWill start working on DeFi from next weekas reported by the company and published by the news site CoinDesk.
“TransUnion will provide traditional (off-chain) credit scores for individuals when they apply for loans on blockchain-based protocols without compromising applicants’ privacy,” They assured via a press release.
Jason Laky, TransUnion’s executive vice president of financial services, explained:
“Credit scoring is an important tool for lenders to help mitigate risk, regardless of which platform they use.”
Users can request their score, information that will then be shared with the corresponding lender.
“LTransUnion’s credit score enables consumers to use their credit history and share their credit information securely with any blockchain-based lending protocol, while helping lenders improve their decision-making and risk management ”Laky developed.
And added John Sun, CEO of Spring Labs:
“As more consumers and lenders turn to blockchain to do business, it’s important to ensure the balance between the information lenders need to assess risk, and the privacy and anonymity users of the technology expect.”
TransUnion’s competition has also already been getting involved in the crypto ecosystem. Last year, Equifax, another company dedicated to credit, signed a partnership with Oasis Lab (ROSE) “to develop identity management and compliance with KYC regulations”. He also collaborated with Credefi for the “score of ecological companies in the European Union”.
The option of crypto loans is not only in the digital field, but also in centralized exchanges, such as Binance or KuCoin. The first has different rates: flexible, 7 days and 30 days. The percentages to borrow Bitcoin range from 1.44% to 2.15% per year, while they rise notably in the case of Binance USD (3.54 to 5.32%).
The arrival of TransUnion in the cryptocurrency market only reaffirms that years ago it ceased to be a small niche to be on its way to massification, which many specialists consider will arrive in the halving.
You might be interested in: