One of three biggest credit rating agencies is reportedly working on a scoring system for cryptocurrencies pegged to other assets, such as the US dollar, gold or other digital assets.
According to a new report from Bloomberg, credit rating titan Moody’s is developing a system that can analyze up to 20 stablecoins based on the quality of the attestations on the reserves that they are backed with.
Stablecoin issuers periodically publish reserve attestation reports certified by third-party audit firms that conduct an independent review to ensure that each unit of stablecoin is sufficiently backed by collateral held in reserve.
Moody’s is developing the scoring system amid growing interest in stablecoins, spurring concerns from regulators and investors, according to the report.
In 2021, US authorities fined Tether, the issuer of the largest stablecoin by market cap, for lying about its reserves.
The crash of the Terra ecosystem in May 2022 was also linked to the collapse of its algorithmic stablecoin. The price of Terra (LUNA) plummeted after TerraUSD (UST) failed to maintain its peg to the US dollar.
A person with knowledge about Moody’s new stablecoin scoring system says the project is still in the early stages and will not represent an official credit rating.
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