INTERVIEW Digital assets gain ground, but risk assessment remains key: Moody's Ratings

By Lee Yeon-woo

• Published Oct 8, 2026 7:00 AM KST

Korea's institutional strength could support digital asset expansion

As digital assets become more deeply integrated into traditional finance, they may change how money and securities are issued, traded and managed — but not the need to understand risk.

For Moody's Ratings, that means preparing for a market in which tokenized assets become increasingly common while ensuring that investors can assess them on a basis comparable with traditional securities.

"We do think that there's going to be increasing investor interest in digital assets, and investors still need an assessment for risk," said Gene Fang, executive director in Moody’s Ratings' sovereign and sub-sovereign ratings group in Asia.

Gene also leads the company's digital economy strategy in Asia. He recently sat down with The Korea Times on the sidelines of Korea Blockchain Week 2026.

From January 2018 to Feb. 2, Moody's Ratings has already rated more than 45 digital issuances globally, including digital bonds and tokenized funds, worth over $6.9 billion.

While early transactions were still experimental pilot stages, momentum has accelerated particularly over the past two years, Fang said, with activity increasing across the Asia-Pacific region. This year alone, Moody's Ratings has rated about four digital bonds issued by Korean companies through their Hong Kong subsidiaries.

"It's not just about institutions investing. It's also about institutions operating in a tokenized environment for things like liquidity management and asset servicing," he said. "All of that is going to drive the need for credit ratings for digital assets. And when all of that falls into place, you'll begin to see greater institutional adoption as well."

Same ratings, new risks

Despite the technological differences, Fang said Moody's Ratings does not treat digital bonds as an entirely separate asset class when assessing creditworthiness.

The agency begins with the same fundamental credit analysis it would apply to a conventional bond issued by the same borrower. It then adds another layer of analysis to account for risks that arise specifically from the digital structure.

Those risks include the resilience of the blockchain platform, as well as potential vulnerabilities in smart contracts and the quality of their auditing and governance.

Moody's Ratings also examines what it calls "asset representation risk" — whether a tokenized bond gives investors the same legal and economic rights as its conventional counterpart. Regulatory uncertainty and cybersecurity risks are also taken into account.

Maintaining a common rating scale is important because it allows investors to compare the credit risk of tokenized and conventional securities directly, Fang said.

When digital assets raise policy challenges

The risks associated with digital assets may extend beyond individual securities and investors. At a sufficient scale, their spread could amplify existing policy challenges for governments and central banks, Fang said.

In economies already grappling with dollarization, for example, broader use of dollar-denominated stablecoins could give individuals a way to protect themselves against inflation or depreciation of the local currency.

At the same time, however, widespread adoption could make it more difficult for central banks to manage foreign exchange flows, enforce capital controls and transmit monetary policy effectively. Those pressures could be more pronounced in emerging markets with tighter monetary controls, he added.

"Tokenization per se does not create any new risks from a sovereign perspective, but at a very high scale, it can tend to amplify existing policy challenges," Fang said.

Korea's balancing act

In Korea, the potential risks surrounding digital asset integration are already at the center of a broader policy debate. Policymakers and industry players have been divided over how to structure a won-denominated stablecoin market, while traditional financial institutions, including the Bank of Korea, have favored a bank-led consortium model, citing financial stability concerns.

Fang said Korea may be better positioned than many other countries to manage such risks because of the strength of its institutions.

"We have a pretty constructive assessment of the strength of institutions here (in Korea)," he said. "Nevertheless, there are some very valid considerations on both sides of the policy debate."

That institutional strength could also give Korea more room to capture the potential benefits of digital assets, provided that risks are addressed through a clear comprehensive framework.

While Korea's considerations differ from those of global financial hubs such as Singapore and Hong Kong, he said the country could still benefit from tokenizing more parts of its financial system, provided policymakers weigh those gains against the costs and challenges of moving away from existing structures.

Fang pointed to Korean companies' experiments with digital bonds as evidence of strong interest in the technology.

"The spirit of innovation is very, very much alive in Korean companies," Fang said. "I think there's just a tremendous amount of enthusiasm and energy in Korea, and where that energy leads is going to be really very interesting and exciting to watch."