Moody’s analysts say the state of Texas could save money and increase transparency by using blockchain to issue bonds. Although the introduction of technology is accompanied by certain risks.
According to the rating agency, such a use case could reduce administrative costs by 35% over the life of a security. The risks of cyberattacks, price volatility and regulatory uncertainty need to be considered. The popularity of digital bonds will take time, although some projects are already underway.
Analysts point to several recently issued municipal debts registered on the blockchain using parallel ledgers. Another advantage of the technology is its immutability, which increases “transparency and verifiability.”
This opens up the possibility for authorities to optimize services, and in some cases even enable mobile voting, the experts added. The rating agency’s report also mentioned mining revenues received by municipalities.