Moody's Ratings, one of the "big three" global credit rating agencies, has taken a significant step into the blockchain space by initiating a pilot program to bring credit ratings on-chain via the Solana blockchain. This move signifies a growing trend of integrating traditional finance with decentralized technologies, potentially revolutionizing how credit ratings are accessed and utilized.
The pilot program, which commenced on June 11, 2025, focuses on assessing the risk of municipal bonds issued by local governments. In collaboration with the startup Alphaledger, Moody's is tokenizing municipal bonds and embedding credit ratings directly on the Solana blockchain using Alphaledger's Vulcan Forge platform. This involves initially evaluating credit ratings off-chain and subsequently publishing them on Solana through an API. The tokenization process transforms the municipal bond into a digital asset that can be issued and traded on the blockchain.
Rajeev Bamra, who heads digital economy strategy at Moody's Ratings, emphasized the company's commitment to embracing innovation in finance and exploring new avenues for the digital finance ecosystem to access credit assessments. He noted a gap in the current system, where most credit ratings are accessible through proprietary software or specialized terminals, hindering broader access. By offering data and ratings on-chain, Moody's aims to bridge this gap and enhance market transparency.
The potential benefits of this on-chain credit rating system are multifold. Firstly, it could significantly enhance access to information for investors, providing trusted, real-time credit insights for tokenized securities. Blockchain technology offers a tamper-proof and transparent database, which could revolutionize the dissemination and utilization of credit ratings. Secondly, it has the potential to make bond trading more efficient and liquid by lowering settlement costs for traders, potentially attracting a broader investor base and reducing borrowing costs for municipalities and bond issuers.
The selection of Solana is strategic, given its high-speed transactions and low fees, making it capable of handling large-scale financial operations efficiently. The on-chain credit rating system ensures that credit ratings are immutable and easily verifiable, providing investors with greater confidence and transparency.
Moody's is also exploring other blockchains and uses of blockchain technology. In March 2025, Moody's worked with Untangled Finance to bring credit scores on-chain on Polygon's Amoy testnet, utilizing zero-knowledge proof (ZKP) technology. ZKP allows for the publication of verified real-time credit rating data on a public blockchain without compromising the original data source, ensuring data privacy. Moody's also announced proof-of-concepts with Metrika and Particula, evaluating risk indicators for digital assets on multiple blockchains, focusing on network health, governance, smart contract design, and other potential risks.
This move towards on-chain credit ratings aligns with the broader trend of tokenization of real-world assets (RWAs), such as bonds, real estate, and commodities. The tokenization market has the potential to reach significant heights, bringing liquidity and transparency to traditional finance and potentially opening up previously inaccessible private markets to a broader range of investors.
The successful implementation of Moody's pilot program could pave the way for wider adoption of blockchain technology in the credit rating industry, enhancing trust and efficiency in financial markets. It also has the potential to redefine how credit ratings are issued and managed, offering increased trust and visibility to investors, while providing municipal governments with faster access to capital and a broader investor base.
