None of the assets received the highest rating

S&P has published a rating of stablecoins with high capitalization

20.03.2024 - 15:35

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1 min

What’s new? Credit rating agency S&P Global Ratings has unveiled its stability assessment of US dollar-linked stablecoins, which, according to its concept, should maintain an exchange rate of 1:1 to the underlying fiat currency. In evaluating the coins, the analysts first looked at the quality of the reserve assets, which is affected by characteristics such as market value and custodial risks. S&P analyzed DAI, FDUSD, USDT, FRAXX, TUSD, USDC, USDP, and GUSD coins.

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What else is known? USDC, USDP, and GUSD topped the list, USDT, DAI, and FDUSD were in the middle, while FRAX and TUSD were named the weakest. In addition, none of the assets received the highest grade (“very strong”).

In evaluating projects, analysts also considered factors such as regulation, governance, oversight, liquidity, redeemability, and technology. In addition, S&P pointed out that there is no transparency or understanding of the risks inherent in various stablecoins in the market.

Last November, rating agency Moody’s released an AI tool to track the risks associated with fiat currency-linked stablecoins. Moody’s also said it recorded 609 instances of stablecoins with high capitalization being decoupled from the fiat exchange rate in 2023.

In January, the TUSD team engaged the Hong Kong division of consulting firm Moore Global as a reserve auditor. The collaboration was part of a global business development strategy and aims to “solidify TUSD’s position as a trustworthy and transparent, industry-leading stablecoin.”

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