The Scoop Moody's Head of DeFi Analytics unpacks the risks of stablecoins and CBDCs
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Mar 31, 2023 Vincent Gusdorf, SVP at Moody's and a blockchain expert, dives into the transformative power of blockchain in finance. He sheds light on the credit risks of stablecoins versus CBDCs, emphasizing the challenges in assessing their creditworthiness. The discussion also explores the potential of tokenizing illiquid assets and integrating digital bonds into traditional markets. Additionally, Gusdorf highlights the importance of privacy in decentralized finance and how innovations like Railgun can enhance anonymity for users.
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Moody's Credit Assessment and Blockchain
- Moody's assesses credit quality by estimating recovery prospects of creditors in case of default. - Blockchain technology is transforming finance by making transactions faster, cheaper, and more efficient.
Stablecoin Credit Risk Uniqueness
- Stablecoins differ from bonds because they often lack maturity dates, requiring new ways to assess credit risk. - Assessing a stablecoin's credit risk involves understanding the promise to holders and how the issuer plans to fulfill it.
Moody's Three Buckets of Analysis
- Moody's credit analysis covers how blockchain impacts market infrastructure, the digital assets born on blockchain, and traditional issuers affected by these changes. - Moody's focuses on credit quality rather than market price directions in crypto.