According to analysts from Moody’s rating agency, implementation of blockchain technology can bring a multitude of benefits for local authorities, including the ability to issue bonds and streamline budget operations.
These benefits may even result in cost reductions of up to 35% for US municipalities. However, while the adoption of this technology could lead to increased transparency and efficiency, it also carries with it the risk of cyber attacks and uncertainties surrounding regulatory policies towards blockchain and cryptocurrencies.
Despite these challenges, Moody’s specialists have already identified several projects using distributed ledger technology for municipal debt obligations.
While the adoption of blockchain for issuing bonds at the local level may take some time, this is a promising first step towards a more secure and efficient system.
Additionally, the immutability and transparency of blockchain records may enable more optimized municipal processes and even voting mechanisms.
Moody’s has also reported that the recent decoupling of the USDC stablecoin from the dollar could negatively impact confidence in the stable cryptocurrency market as a whole.
As such, it is crucial for local authorities to weigh the potential benefits and risks of implementing blockchain technology carefully.