Moody: Private Blockchains Are More Exposed to Fraud Risk

According to Moody’s latest report titled “Blockchain Improves Operational Efficiency for Securitizations, Amid New Risks,”, there are several warnings on the use of private blockchain.

“Private/centralized blockchains are more exposed to fraud risk because system design and administration remains concentrated with one or few parties.” Said Moody. Regarding public blockchain, while it makes data recovery and auditing easier, it increases the number of gateways for attacks.

Moody outlined some of the potential benefits blockchain can bring to the industry. For example, smart contracts can make the process of security issuance more efficient. The report also highlighted the use case of loan issuance which makes the banking operations faster and more efficient.