S&P Global Ratings, the storied ratings agency known for assessing the stability of banks, credit facilities and other financial institutions and products, has turned its eyes to stablecoins, giving its first wide-ranging synopsis of the state of these supposedly moored blockchain-based assets. In an overview of the relative ability for eight stablecoins to be redeemed for one dollar, the currency to which they are all pegged, S&P has also — arguably and indirectly — affirmed that stablecoins are likely not going anywhere.
“We always say our role is [assessing if] there are ways that we think that we can reduce the asymmetry of information in the market — that is really the way I see our role in the market,” Lapo Guadagnuolo, a senior analyst at S&P Global Ratings, said in an interview with CoinDesk. He added that crypto “is something we’re putting strong resources towards, because we know it’s a growing area both in traditional and new financial areas.”
That said, of the eight stablecoins S&P reviewed, several received lackluster scores. Most notably Tether’s USDT, the largest stablecoin by market cap and most used crypto asset in terms of trading volume, was given the fourth-lowest score in range from 1 to 5. Meanwhile MakerDAO’s dai [DAI], popular across decentralized finance (DeFi), and the Justin Sun-backed TrueUSD, the fourth and fifth largest stablecoins, respectively, were also given low scores.
At the end of 2023, crypto is not yet past the age where receiving any attention — positive or negative — from an institution like S&P is seen as a form of affirmation. A similar phenomenon happened two years ago, when the U.S. Treasury Department under Janet Yellen convened a study group to determine the risks that Tether’s stablecoin posed to the U.S. economy, which can be validating for industry actors with anti-establishment roots.
Similarly, S&P’s report is a signal that these tools are important — whether or not they actually represent technical advancements.
“The ratings are a very positive development in the normalization of stablecoins,” Nic Carter, a co-founder of VC firm Castle Island Ventures, who began his career as Fidelity’s first dedicated bitcoin [BTC] analyst. “I have quibbles with some of the methodology used, but the fact that the…
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