MODERNIZATION OF CREDIT INFRASTRUCTURE BASED ON DISTRIBUTED LEDGER TECHNOLOGIES (BLOCKCHAIN) AND SMART CONTRACTS

Abstract

The primary objective of this study is to comprehensively investigate the pathways for modernizing the existing credit infrastructure through the systematic implementation of distributed ledger technologies and smart contracts. The current financial landscape demands a transition from traditional centralized banking paradigms to more resilient, transparent, and efficient decentralized frameworks. This study introduces a theoretical framework for the seamless integration of blockchain architecture into conventional lending processes, encompassing the entire credit lifecycle from initial borrower assessment to the final repayment of loan obligations. This model specifically addresses the operational bottlenecks prevalent in contemporary credit institutions, offering a structured approach to digital transformation. The scholarly innovation of this work is driven by the conceptual grounding of mechanisms for decentralized data storage within the context of credit histories and scoring algorithms. Unlike existing centralized databases that are vulnerable to single points of failure, the proposed framework guarantees data immutability and minimizes the risks of manipulation. Furthermore, the study provides a novel economic rationale demonstrating how distributed ledger technologies fundamentally alter the cost structure of lending by significantly reducing transaction costs and eliminating redundant intermediaries. The empirical utility of these conclusions becomes evident in the immediate capacity for financial institutions to automate the verification of borrowers and drastically accelerate the execution of credit agreements. By utilizing the developed framework, banks and alternative lending platforms can enhance digital inclusion, providing broader access to credit resources for previously underserved segments of the population. The implementation of these technologies allows for a substantial reduction in operational overhead and improves the overall resilience of the financial sector. Ultimately, the research conclusively proves that the deployment of smart contracts ensures the unconditional and automated fulfillment of financial obligations without the need for third-party arbitration or manual oversight. The underlying technology creates a highly secure, immutable, and transparent environment for the formation and management of credit histories. This transition actively promotes the development of a robust digital financial market, particularly vital for transforming economies such as Ukraine, facilitating the creation of a modern, inclusive, and highly competitive credit services ecosystem.