A Surge in Digital Debt Has Moody’s Calling for Greater Scrutiny

A new breed of bond is creeping its way into modern debt markets, built upon the same sort of technology that makes cryptocurrencies both innovative and, sometimes, risky.

Issuance of digital bonds — or debt that is issued and managed on distributed ledger technology — is gaining momentum, with at least 10 new sales in the six months ended May 31, according to Moody’s Investors Service. That’s compared to just 12 digital bond sales in all of 2022.

It’s a development that stands to reinvent debt markets by paring back the number of intermediaries in a bond deal and ...