Morningstar, one of the new names among credit rating agencies globally, is seeking ways to revolutionize the debt securities sector through blockchain technology.
The Morningstar blockchain project will also serve as its move towards reaching a top position among rating agencies. For now, the company is considered a newbie in the sector, compared to industry behemoths like Standard & Poor’s and Moody’s.
Competitive Advantage
The leading benefit blockchain platforms can bring to the world of debt securities is credibility and trustworthiness. The security capabilities of blockchains and distributed ledgers have inspired the company to launch the Morningstar blockchain project.
By far, none of the big names in the industry have made steps towards introducing blockchain technology to their customers, or internal organization. Consequently, Morningstar is looking to both revolutionize the industry and to improve the products they are bringing to their customers.
Blockchain Startups
One of the primary support resources for Morningstar during the integration of blockchain technology will come from the company’s clients. So far, Morningstar has attracted several blockchain startups. These companies are part of the push towards introducing the technology on a global scale.
Currently, Morningstar is creating one of the largest blockchain-based communities in the debt securities industry. Some of its clients have set up their activities on the Ethereum blockchain, while others are owners of private blockchains, designed explicitly for their businesses.
Even so, despite the differences in approach, business loan securities, and housing securities involve storage on blockchains. This diversity of clients has allowed Morningstar to become a bridge-builder between two very different sectors.
The Morningstar Blockchain Project
Morningstar has shown a significant interest in the benefits that blockchain technology can bring to the world. This includes credit ratings and analytics. Back in 2018, Jim Sinegal, who is an associate director at Morningstar, released a detailed analysis of how big brands manage to incorporate blockchain technology in their processes. Even then, the company predicted that blockchain would have a significant impact on the credit rating sector.
Now the Morningstar initiative is exploring different applications of distributed ledgers and blockchain technology. According to Morningstar’s CEO Michael Brawer, many of the company’s clients are looking for innovation. In particular, they want to start issuing debt securities through blockchain technology.
Aside from client involvement, Morningstar itself is currently checking out blockchain’s capabilities. This includes exploring credit opinions, ratings, and even credit data analysis.
Morningstar’s involvement with blockchain-based securities businesses has moved to a larger scale over the past several months. The company is continuously attracting new blockchain startups looking to issue debt options through the technology.
The company is now often regarded as a haven for young companies looking to keep up with modern technologies.
While the industry is lagging when it comes to blockchain adoption, Morningstar is going in a different direction. They are betting on their blockchain initiatives to revolutionize the industry, and propel itself to the top places in the credit rating sector.
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