In this episode of FRT, Fabian Astic, Managing Director and Global Head of Decentralized Finance and Digital Assets at Moody’s Investors Service, asks critical questions like “Why do we need digital currencies?” and “What is their value?” Fabian analyzes the use cases for various types of digital currency, from cryptoassets to stablecoins to deposit tokens to CBDCs, and closes by sharing his views on the future of decentralized finance.  

Fabian and his group at Moody’s are responsible for digital finance across the rating agency. Prior to his current role, Fabian was in charge of quantitative analytics and innovation at Moody’s, lending robust perspective to the evaluation of use cases for digital currencies that present long-term value. Moody’s has rated a number of digital bonds and published a range of research on topics within digital finance, to include specific digital assets, sector comments, and interaction between cryptofinance and traditional finance.

Looking over the past three years in digital assets, 2021 saw speculative investment and resulting price increases in digital asset markets that drove rapid innovation. 2022 saw a reckoning and market correction that was much needed to rid the market of much of the rampant speculation, leading to the collapse of numerous crypto firms. 2023 has brought in renewed focus on trust and ensuring firms are pursuing innovations with real, long-term economic value.

How should we envision the future of financial infrastructure and the financial instruments that exist within it? And how are we seeing these dynamics play out from a market perspective to produce that long-term value, or not? Will they ever?