Blockchain Technology standardization will amplify benefits for securitizations by 2021, according to a report by the American business and financial services company, Moody’s. Moody’s Report Suggests Blockchain Technology Likely to be Standardized by 2021.
The firm claims that standardization will be a positive credit for technology-based securitization. Thus, encouraging benefits such as improved interoperability and other operational efficiencies, Moody’s Investors Service said in a report.
Frank Cerveny, Senior Research Analyst at Moody’s said:
“Standardization of blockchain technology would make its benefits more accessible for securitizations. Standardization would improve interoperability across systems and market participants, but also reduce counterparty concentration, operational and legal/regulatory risks for transactions that use blockchain technology.”
Moody’s Report Suggests Blockchain Technology Likely to be Standardized by 2021. According to the report, standardization would enhance interoperability between blockchains, applications built on the same blockchain. As well as between blockchains and legacy IT systems, facilitating the creation of blockchain-based ecosystems. Ultimately reducing the need for long and redundant processes of reconciliation across transaction parties. Also, substituting sequential actions with parallel execution.
The International Organization for Standardization (ISO) mainly drives global blockchain standardization. There are currently numerous standard and interoperable independent blockchains which, however, limit operational efficiency gains and increase the risk.
Per the report, standardization can save time and cost through faster data access, removal of transaction parties and automation, as examples.