S&P Global has launched a stablecoin stability assessment. In its initial rating of eight stablecoins, none were given the top score, but two received the lowest score, based on their ability to maintain fiat pegs.
S&P Global was the first to establish its ratings, according to a statement. Check Considers asset quality risks, then factors mitigating the risks, and then governance, legal and regulatory framework, callability and liquidity, technology and third party dependencies and track record.
S&P Global, formerly known as Standard & Poor’s, is known for the S&P 500 index of large companies listed on United States stock exchanges. it is turned his attention to stablecoins Earlier, but not with the depth of the new rating. Lapo Guadagniolo, senior analyst at S&P Global Ratings, said:
“We see stablecoins becoming more embedded in the framework of financial markets, acting as an important bridge between digital and real-world assets. Still, it is important to acknowledge that stablecoins are not immune to factors such as asset quality, governance, and liquidity.
Gemini (GUSD), Pax (USDP) and USD Coin (usdc) received a rating of 2 (Strong), the highest rating given due to the quality of their asset backing. Both Gemini and Pax are supervised by the New York State Department of Financial Services.
Connected: France’s third-largest bank, Societe Generale, launches euro-pegged stablecoin
bond (USDT), by far the leading stablecoin by market cap, was given a rating of 4 (Disrupted). The assessment was largely based On the lack of transparency of its assets. TrueUSD’s 5 (weak) rating was also based on a lack of information. Despite its continued reliance on the algorithm, FRAX was given a rating of 5 A community decision in March For changes in USD support.
Crypto may not care, but the much larger mainstream will. S&P issues stablecoin ratings using a 1-5 score.
1 “Very Strong” None
2 “Strong” USDC/USDP/GUSD
3 No one is “enough”
4 “Disrupted” USDT/FDUSD/DAI
5 “Weak”Frex/TUSDhttps://t.co/D1VkXZ3NkG– Novacula Occami (@OccamiCrypto) 12 December 2023
Moody’s Rating Service Moved to stablecoin analysis In November with its digital asset monitor service based on artificial intelligence.
magazine: Volatile Coins: Depegging, Bank Runs and Other Risks Looming
