The Morningstar Credit Ratings will start to provide cryptoassets risk rating to security tokens. The company, which already provides the rating of mutual funds such as Prudential and Morgan Stanley, now wants to get out in front of agencies like Moody and Standard & Poor’s in this segment.
Although Morningstar’s ranking services extend to government and corporate bonds, its work in blockchain has been so far limited to structured financial debt instruments.
What changes with the risk rating of the cryptoassets?
With Morningstar’s entry into the cryptoassets risk rating branch, a few billion dollars can be injected into the industry. That’s because, many investors who would like to enter this market still await the moment when the cryptoassets finally become convincing.
“We are checking how we can also provide credit ratings. In addition, we are looking to provide our services in a blockchain”, said Michael Brawer, head of operations at Morningstar Credit Ratings.
Morningstar is working on two fronts. The first will allow the company to rank titles directly in the Ethereum blockchain or in other blockchains through a technology called Oracle.
The second blockchain product is also for debt securities. In this case, however, Morningstar offers quantitative rating models that it uses internally in a blockchain. Like the other rating companies, Morningstar uses these models to determine the creditworthiness of debt securities.