Onchain Reputation to Replace Traditional Credit Scores, Says Coinbase CEO

Coinbase CEO Brian Armstrong believes that onchain reputation will soon replace traditional credit scores. The FICO score, used in 90% of top US lending decisions, currently assesses borrowers based on payment history and total debt.

The FICO score is calculated by credit bureaus, with borrowers having limited visibility into the process. In contrast, public ledgers like Bitcoin's blockchain already log repayment history, wallet age, and counterparty behavior, allowing any lender to access the same record.

Coinbase has continued to expand its crypto lending push, despite a 17% decline in crypto lending to $56.16 billion in the second quarter of this year, according to Galaxy Research.