[DennisP]

Set it up legally so the loans in the system are only transferrable via on-chain payment, and teach the courts how to read those records, and it doesn't matter what the incentives are. The chain is the source of truth that way. If you're recorded as the owner on chain, you're the owner, full stop.

[root_axis]

If you're going to setup an entire legal framework that forces businesses to use a particular record keeping system then the problem is already solved. You could legally force businesses to keep appropriate records or to participate in a centralized record keeping system operated by a trusted third party like a government or tribunal. You could also use a blockchain for this, but it doesn't offer much value.

[DennisP]

They're already required to keep appropriate records. But the courts don't have money to go checking so they just trust companies to swear they have them, and the companies lie.

And sure, you could spend a bunch of money setting up a government database and employees to run it, but at some point it's easier to write a few lines of code and be done with it.