Coinbase CEO: On-Chain Reputation Will Replace Traditional Credit Scoring
According to BeInCrypto, Coinbase CEO Brian Armstrong stated that on-chain reputation will become the next generation of credit scoring systems, potentially replacing FICO scores, which currently drive 90% of top-tier lending decisions in the U.S. In a reply to Base founder Jesse Pollak, Armstrong noted that public ledgers can already track repayment history, wallet age, and counterparty behavior, enabling any lender to access the exact same on-chain records.
Currently, Ethos Network rates wallets through mutual user endorsements, and the lending app Credifi leverages these scores to offer unsecured loans of up to $3,000 to wallets achieving a score of 1,800. However, since on-chain addresses are not tied to real-world identities, borrowers can simply create new wallets at any time. Whether on-chain reputation can accurately price genuine risk remains to be validated by future default rate data.
