Moody’s is a well-known credit rating agency from the United States that is working on stablecoins, according to a new report from Bloomberg. Stablecoins are crypto coins whose value is pegged to another currency or asset, such as the US dollar. If Bloomberg’s story is correct, the credit rating agency is currently working on a scoring system to assess the quality of 20 different stablecoins.
Moody’s is working on a scoring system for stablecoins, the crypto sector’s most traded tokens, as the asset class faces more scrutiny from regulators and investors https://t.co/j9Hng5diCz
— Bloomberg Crypto (@crypto) January 26, 2023
In its infancy
The story shows that the project is still in its infancy at the moment, but that could of course change soon. Moody’s does not intend to issue official credit ratings on the stablecoins it will review. Still, it is interesting that a famous credit rating agency like Moody’s is going to test the quality of the various major stablecoins.
The resilience, security and stability of stablecoins has been a topic of conversation within the crypto industry for years. Even the large Tether (USDT) is still regularly under scrutiny from critics. In that respect it is interesting that a party like Moody’s is now coming up with a framein which we can objectively assess the quality of stablecoins.
It is not yet clear when exactly Moody’s will release the first version of the ratings. That may take quite a while, as it is still in its infancy at the moment.
The stability of stablecoins
It would be interesting if Moody’s could find a way to really reassure us about the quality of stablecoins. These crypto coins still see a lot of criticism and there are regular questions about whether the companies behind the stablecoins really have everything in order, especially with regard to coverage. So-called algorithmic stablecoins are seeing even more criticism, especially after the collapse of the terraUSD (UST) stablecoin of the terra (LUNA) project last year.
It is therefore to be hoped that Moody’s results will turn out well for these coins. It is also to be hoped that Moody’s does not use this as an attack on the industry. We often see players from the traditional financial world take such an initiative to simply crack down on the crypto industry.