A milestone in China's Internet finance sector took place on Jan 1, when Dagong Global Credit Rating Co Ltd released a "credit risk blacklist" and "early warning list" for the sector－the first such reports on the industry.

Internet finance has so far failed to deliver benefits for all market participants. That is especially true of small and medium-sized enterprises and other players in the real economy.

Online finance has become something of a casino for a handful of financial players.

Debtors can manipulate Internet finance by taking advantage of the absence of regulation and lenders' hunger for profit and low risk awareness, as well as by providing false information. Most online debtors cannot possibly make the profits needed to deliver the high returns promised to creditors, and they simply borrow again to repay old debts.

The fact that they can operate this way suggests that Internet finance is headed inexorably for a crisis. Internet finance has developed into an integral part of the financial system in China. It plays a critical role in the entire debt chain, but it is laden with risk.

Systemic risk in this sector could wreak havoc on the national credit system.

Rules, ratings, rational strategies, a legal framework－all are absent from the Internet finance sector. No promising future can be predicted.

We must carefully consider rules to govern the evolution of cyberfinance and map out a correct growth mode, enabling China to help lead the worldwide financial revolution.

E-finance must serve the real economy. It should price transactions to allow for legitimate profits. It should also ensure public access to debtors' information, assign creditors the role of monitor, insist on professional credit ratings and maintain blacklists to control credit risks.

The use of credit ratings to establish and maintain credit relationships is a necessary move. And e-finance, as an advanced and emerging form of credit, calls for a revolution of credit ratings.

Internet finance is a financial revolution based on digitalization. Now, ratings also need to move into the digital era.

The author is chairman of Dagong Global Credit Rating Co Ltd. The views do not necessarily reflect those of China Daily.