Credit rating agency %Moodys Corp. (NYSE: $MCO) has completed a trial that shows municipal bond ratings can be embedded into blockchain-based securities.
The trial was conducted on the %Solana (CRYPTO: $SOL) %Blockchain and showcases how credit ratings that are usually distributed through traditional data terminals can also be integrated into tokenized assets on public blockchains.
As part of the test, simulated municipal bond ratings were tokenized and moved to Solana’s public blockchain.
For financial institutions and large institutional investors, the lack of standardized, trusted information transfer over blockchain remains a hurdle.
Moody’s is hoping that placing a known credit rating into a secure token and disseminating it over a blockchain will allow traders and portfolio managers to make informed decisions about debt instruments in real time.
The test also highlights how blockchain technology can complement traditional financial networks, with potential applications to funds and credit, as well as bonds.
The process known as tokenization promises more efficient operations, interoperability, and faster settlements than current legacy finance technology.
Boston Consulting Group and Ripple have forecast that tokenized assets could become an $18.90 trillion U.S. market by 2033.
Moody’s said it will continue exploring how its ratings can serve digital finance. Future implementations could include other fixed income products such as corporate bonds.
The stock of Moody’s has gained 3% this year to trade at $485.02 U.S. per share.
