Chinese Banks to Update a Shared Ledger of Users With Bad Credit Scores
Suning, the banking arm of Chinese retail, is testing a consortium blockchain which would allow the participating banks to update and record a shared ledger of all the users with bad credits.
Sina Finance, a local news source said that the Suning Bank has developed the blockchain system to move its blacklist of borrowers to a database, which is distributed and allows collaboration with other banks to prevent credit fraud.
Each participating bank becomes a node of the blockchain, and can access the original blacklist shared by Suning Bank. Node institutions can further update the list with their own data, the report indicates.
Founded in 2017 by Suning, Suning Bank, is one of the first online-to-offline commercial banks in China, launched by established private companies to provide loans to small and medium businesses.
To share data on users’ trustworthiness is the latest move by the financial institution to utilize blockchain technology in managing their credit systems.
The bank joined another blockchain consortium back in September, last year. The consortium was created by two other private commercial banks – CITIC and Minsheng. This uses a blockchain system to record transactions of domestic letters of credit.
CITIC, in March claimed in its annual financial filing that the platform has already facilitated transactions worth a total of $156 million.