Altcoin News: Morningstar to Launch Ethereum Blockchain Debt Rating Service
October 2, 2019, by Marko Vidrih on ALTCOIN MAGAZINE
Morningstar Credit Ratings will create a system for evaluating debt securities issued in the form of tokens. This was announced by Morningstar COO Michael Brawer in a conversation with Forbes on Tuesday.
According to him, the new rating service can turn the debt securities industry, valued at $117 trillion and managed by various custodians and trust intermediaries, into a decentralized financial network. He also expects this to help boost the legitimacy of digital assets and attract billions of dollars of investment.
The rating division of Morningstar will publicly evaluate crypto assets on a scale of 1 to 5, and customers will receive tools for making more informed investment decisions by paid subscription.
The Morningstar system will be based on the Ethereum blockchain. Subsequently, its capabilities will be distributed to other networks with the help of oracles. It is expected that the launch of public services will take place before the end of this year.
According to the company’s own admission, the clients who are involved in the issuance and securitization of debt instruments, including representatives of small business lending services, pushed it to create this product. The company works with both government and corporate bonds, however, the possibilities of its service on the blockchain will be limited by structural debt instruments. In addition, the solution will allow direct connection of lenders and borrowers, eliminate custodians and trusted intermediaries from the process, and save up to 500 base points on commissions during transactions.
Morningstar does not exclude that the US Securities and Exchange Commission (SEC) can contact them to verify the reliability of its tools on the blockchain. Partners of Morningstar to launch the service may be fintech startup Figure, alternative investment company Cadence and DeFi platform Polymath.
Author: Marko Vidrih
