Suning Bank, one of the largest non-government retailers in China with 1,600 stores in 700 cities, has developed and is testing a blockchain-based blacklist that would help reduce credit fraud.
The bank will move its blacklist of suspect borrowers with low credit scores to a distributed blockchain ledger, with the goal of collaborating with other banks to reduce credit card and loan fraud in China. The banks that participate in the system will be able to add their own data to the blacklist.
This will create an immutable cryptographically-secured ledger that cannot be manipulated or hacked. Often, credit card fraudsters can be the best hackers, so it is important to create a blacklist that is hack-resistant so a fraudster doesn’t infiltrate the system and take themselves off of it.
The blockchain-based blacklist could become an essential database when considering credit card and loan applications, and will make background checks more efficient. It will combine blacklist data from many different banks into one database.
Each bank and financial institution that participates in the blacklist will function as a node, securing the system’s blockchain.
This isn’t Suning bank’s first blockchain project. In September 2017, it joined two other Chinese banks, CITIC and Minsheng, to create a blockchain that records transactions of letters of credit. As of March 2018, this system has recorded USD 156 million of transactions.
Although China’s government banned cryptocurrency trading in September 2017 and forced major cryptocurrency exchanges to leave the country, Chinese corporations and governmental organizations have increasingly embraced blockchain technology. China’s State TV said blockchain is ten times more valuable than the internet since it is a machine that produces trust.
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