Benzinga | Jan 12, 2022 12:03PM EST

TransUnion To Make Consumer Credit Data Available To Cryptocurrency Lenders

The consumer credit reporting firm TransUnion (NYSE:TRU) will now provide cryptocurrency lenders operating via the blockchain access to its consumer credit data.

What Happened: According to a Wall Street Journal report, TransUnion will deploy Spring Labs' ky0x Digital Passport to enable this data access. As a result, qualified consumers could be eligible for better interest rates.

"By having this available, you begin to open the tap for capital coming in, and that increases the competition," said Steve Chaouki, TransUnion's president of U.S. markets and consumer interactive, who added that this access will encourage more companies to develop cryptocurrency and DeFi applications while remaining compliant with banking and consumer protection regulations.

Related Link: Average US Household Carries $155K In Debt

Why It Happened: TransUnion's announcement provides a small opening for U.S. financial services companies to participate more fully in the cryptocurrency market.

An analysis by JPMorgan (NYSE:JPM) determined the total value of DeFi applications on the Ethereum (CRYPTO: ETH) blockchain was nearly $200 billion in November, up from $20 billion one year earlier. But the bank's analysts warned the federal banking and consumer protection regulations are forcing U.S. lenders to sit on the proverbial sidelines as this market grows.

"Enforcing know-your-customer and anti-money-laundering checks is a necessary first step, but a general perception that regulations would be naturally less effective on DeFi might prove a major obstacle going forward in terms of regulators allowing DeFi to transition into the mainstream," said the bank's analysts.

Now Read: Is DeFi Dangerous? Elizabeth Warren Thinks So

Photo: World Spectrum / Pixabay