Moody’s looking for a cryptocurrency analyst

Moody’s, one of the three major rating agencies in the world, is reportedly looking for a cryptocurrency analyst. 

Moody’s want a cryptocurrency analyst

In recent days, a job advertisement has appeared on the company’s website for an expert in cryptocurrency and with financial analyst experience in credit rating. 

“You will be part of a team of individuals responsible for supporting successful project deliveries for our C4E”, reads the ad posted by Moody’s. “The role also includes advocating for operational and process changes to move towards a more data-driven organizational paradigm”.

The job could also take place remotely, though the ad says that Frankfurt, London, New York or Paris are preferred locations. From what can be read in the ad, experience in the world of financial analysis related to credit rating is required, but must also have a good knowledge of decentralized finance.

The rating agency has long shown interest in blockchain technology and its applications in the credit rating branch. 

“Standardisation of blockchain technology would make its benefits more accessible for securitisations”, Frank Cerveny, VP-Senior Research Analyst at Moody’s, said earlier this year. “Standardisation would improve interoperability across systems and market participants, but also reduce counterparty concentration, operational and legal/regulatory risks for transactions that use blockchain technology”.

The financial world is increasingly interested in DeFi

This announcement shows how the traditional finance world is increasingly interested in decentralized finance. Moody’s is requesting that the new analyst also has information on the world of CBDCs (Central Bank Digital Currencies), Stablecoins and also NFTs (Non-Fungible Tokens).

DeFi is becoming one of the most interesting topics for the financial world because of its innovative applications that make it in some cases more efficient than the traditional system managed by intermediaries.

Peer-to-peer digital lending, for example, opens up possibilities for new forms of financial interaction in a decentralized system. Blockchain-based lending improves the lending model. Programmatic and peer-to-peer margin calls could mitigate the likelihood of credit crises and over-indebted systems.

Each loan is based on a rating of the borrower, whether state or private, and based on this a score is given by the major rating agencies to determine the cost of money to have a loan. DeFi could bring about a kind of revolution to this traditional scheme. Compound, Dharma, dYdX, and Lendroid are just some of the more interesting projects in this regard, but others are taking shape for an industry that is expected to grow strongly within the next ten years.

What is DeFi 

DeFi (Decentralised Finance) aims to eliminate intermediaries such as banks, brokers or financial and insurance institutions, which can introduce inefficiencies into the financial process, whatever it may be. DeFi Blockchains algorithmically regulate interactions allowing the user to buy, sell, lend and borrow in a much more efficient and cost-effective way than the traditional method.

Most of these applications are built on Ethereum, the world’s second-largest cryptocurrency platform, through its smart contracts. According to data from the website Defipulse.com, contracts related to decentralized finance would be worth about $98 billion, with about 200 projects in place.

According to a 2020 report by the World Trade Organization, the International Chamber of Commerce and Trade Finance Global, the financing gap for SMEs is about $5 trillion. According to the report, decentralized finance could be a solution to relieve a financial sector increasingly struggling to meet such demand. 

Decentralized finance has also shown good resilience in the face of the extreme volatility of the crypto market and the sell-offs seen in recent months, not least because it uses stablecoins as collateral, which, being linked to an underlying fiat currency such as the dollar, are much less volatile than traditional cryptocurrencies such as Bitcoin.