Moody's: Blockchain Technology is 'Creating Competitive Pressure'

A new report from Moody’s Corporation details that there are currently over 120 blockchain-related projects involving Ethereum, Hyperledger, Microsoft, Bitcoin, and R3 CEV development.

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120+ Businesses are Working on Blockchain Platforms

In Moody’s latest research offering called “Credit Strategy — Blockchain Technology: Robust, Cost-effective Applications Key to Unlocking Blockchain’s Potential Credit Benefits” the company details the many advantages of distributed ledgers and how businesses may overcome challenges.

The report lists the many applications being built, which range from capital markets, trade finance, and energy to government policies, and healthcare. The credit rating agency says capital markets can be improved by “providing a shared and synchronized blockchain among participants.”

Government agencies worldwide are also interested in this emerging protocol, according to the report, which noted the People’s Bank of China (PBoC) and its investment into digital currency and blockchain applications R&D. Furthermore, distributed ledgers could transform traditional markets with better efficiency and security when it comes to record keeping and a “variety of mainstream processes and regulated industries.”

Robard Williams, Senior Vice President for Moody’s, stated in the announcement:

There is significant enthusiasm for the potential of the technology, but there is still a limited track record of large-scale blockchain implementation in a regulated environment, and many hurdles lie ahead before we see widespread applications.

These hurdles include blockchain technology compatibility, industry standards, and how regulatory policy will affect this fledgling industry. Nevertheless, in the long term, Moody’s believes that the benefits of this technology will outweigh the challenges providing markets with greater efficiency, speed, cost-value, security, and overall reliability.

The firm also highlights how blockchain technology could advance credit implications for rated issuers adding more streamlined processes by creating “competitive pressure from incumbents and new entrants that improve processes by leveraging blockchain technology.”

Moody’s List is Extensive

Moody’s definitive list of over 120 projects include firms such as Absa, Accenture, Digital Asset Holdings, Australian Securities Exchange (ASX), Bank of America, Citi, Barclays, BBVA, New York Stock Exchange, and many other big name companies, who are curious to see whether blockchain technology can improve the way society handles data, finance, and media content on a global level.

Interestingly, top audit and consulting firms, PwC and Bain, respectively, just began warning businesses that “blockchain illiteracy” could “hurt” banks and a wait-and-see approach could leave institutions “flat-footed.” Perhaps it won’t be long before Moody’s — an agency that rates over 170,000 corporate, government and structured finance securities worldwide — will also include Bitcoin/blockchain IQ in their own rating system.

What do you think of the Moody’s agency report concerning blockchain technology and its transformative nature? Let us know in the comments below.

Images courtesy of Moody’s websites, Pixabay