On Tuesday, S&P Global Ratings released its stability assessment for various stablecoins, including Dai (DAI), First Digital USD (FDUSD), Tether (USDT), Frax (FRAX), TrueUSD (TUSD), and USD Coin (USDC), according to Blockworks. The analysis primarily focused on the quality of assets backing the stablecoins, taking into account factors such as custody risks, credit, and market value. Additionally, considerations like regulation, governance, supervision, liquidity, redeemability, and technology played a role in the evaluation.
The stablecoins received varying assessments, with USDC, USDP, and GUSD obtaining strong ratings. In contrast, USDT, DAI, and FDUSD were considered middle-of-the-road or constrained, placing them on the weaker end of the spectrum. FRAX and TUSD received weak assessments. Notably, none of the stablecoins received a very strong evaluation, which is the highest grade in this initial assessment.
It's essential to clarify that these assessments provided by S&P Global Ratings are not ratings but rather an initial effort to shed light on the risks associated with different stablecoins in a market that lacks transparency. Mohamed Damak, the senior director at S&P Global Ratings, emphasized that four out of the eight stablecoins assessed underwent a negative adjustment.
Moreover, Damak highlighted the market's lack of transparency and insight into the inherent risks of different stablecoins. As the decentralized finance (DeFi) ecosystem continues to grow, S&P anticipates a rising universe of coins and use cases. The ratings agency may expand its assessments in the future, indicating a commitment to monitoring the digital assets sector for various risks, including operational and legal risks, blockchain oracle risk, crypto regulation, and digital bonds.
