Blockchain Standardization Expected to Happen by 2021: Moody’s Research
According to recent research conducted by global rating agency Moody’s, the Blockchain industry will become standardized by 2021. The current lack of standards and operability holds back the securitization industry from adopting the technology.
The importance of standardization
Blockchain, one of the most disruptive technologies of the previous century, could be a boon for the securitization market. It can decrease the cost of issuing asset-backed securities, improve transparency and increase security.
However, the fragmented Blockchain landscape creates operational, regulatory, and legal problems. Those parties that are involved in the securitization process can reap the above-mentioned benefits only when there is a standardized framework for a multitude of different distrusted ledger platforms.
Particularly, standardization could ensure better data availability and eliminate the need for mandatory reconciliation processes. On top of that, it will allow seamlessly conducting internal and external audits.
A unified Blockchain vocabulary
Let’s face it — regulators around the globe still struggle to grapple with Blockchain terms. For instance, they will probably have a hard time understanding what ‘beacon chain’ with the advent of Ethereum 2.0.
Creating common terminology is necessary for regulators to come up with legal frameworks that would propel the adoption of DLT.
As of now, of ISO/TC 307 (International Organization for Standardization Technical Committee 307) is working on Blockchain and DLT standards that span such areas as terminology, security risks, legally binding smart contracts, taxonomy, and ontology.