By CCN: Moody’s is one of the world’s best-known rating agencies, and it appears they are ready to admit they see some upside in blockchain technology. They also claim there are systemic risks to conventional finance from the adoption of the tech.
Moody’s Is Concerned About “Concentrated Risk” When Using Blockchain
Yes, you heard that correctly. Moody’s angle is not that blockchain technology is displacing and disrupting archaic financial systems. Instead, they argue that its application is risky:
“New key transaction parties will be introduced to the process, namely the entities that serve as developer, provider, and operator of a blockchain. They may be either closely linked or identical with the originator, or independent third-party service providers, which could lead to a certain degree of counterparty concentration risk. [This] may also assume a systemic component.”
No System Is More Concentrated Than The World’s Reliance on the U.S. Dollar
This argument has always been out there and it’s frustrating, to put it mildly. To dissuade someone from doing something, fear is an excellent deterrent. Another good tactic is to take the biggest problem with your system and claim that it’s the biggest issue with the usurper. Conventional finance is so overwhelmingly reliant on the US Dollar and the Federal Reserve that any criticism of something else for being “concentrated” is the ultimate hypocritical situation. The blockchain is the target in this scenario.
Bitcoin and many of its peers utilize a vast and complex network. Many of the most exceptional engineers in the world build and maintain them. The way Moody’s writes about it, you would think it was four men and a dog in a shed. If one calls in sick, then the whole system collapses!
Banks Are Resistant to Change
As ever, the issue here is that banks have resisted change for a long time and it’s expensive and time-consuming to shift to a more efficient platform. Moody’s is not exactly…