World credit standing company Moody’s is testing a system to price municipal bonds straight on the Solana blockchain.
One of many “big three” international credit standing companies has entered the blockchain area. On Wednesday, June 11, Moody’s started testing the issuance of credit score scores straight on the Solana (SOL) blockchain. These credit score scores will likely be used to evaluate the danger of municipal bonds issued by native governments.
Moody’s will first assess credit score scores off-chain, then publish them to Solana utilizing an API. The corporate will use Alphaledger’s Solana-based tokenization protocol to show these scores into tokenized, real-world belongings.
Why Moody’s is testing blockchain for credit score scores
The pilot might finally carry credit score scores absolutely on chain, considerably bettering entry to info for traders. At present, most scores can be found solely via Bloomberg terminals or proprietary software program. Utilizing blockchain would provide Moody’s a tamper-proof, clear database.
“We continue to embrace innovation in finance and actively explore new avenues for digital finance ecosystem to access our credit assessments,” mentioned Rajeev Bamra, head of technique for digital economic system at Moody’s Scores.
The system additionally has the potential to make bond buying and selling extra environment friendly and liquid by decreasing settlement prices for merchants. For municipalities and bond issuers, it might entice a broader investor base and scale back borrowing prices.
“We’ve demonstrated a potential scalable model that can unlock liquidity to real world assets by providing investors access to a trusted brand like Moody’s Ratings,” mentioned Alphaledger CEO Manish Dutta.
Actual-world belongings stay probably the most promising use circumstances for crypto. In line with Ripple and BCG, the tokenization market might attain $18.9 trillion by 2033, because of its capability to carry liquidity and transparency to conventional finance. RWAs may open up beforehand inaccessible non-public markets to a broader vary of traders.