One of the three largest credit rating agencies is working on a scoring system that can be used to score cryptocurrencies compared to other assets such as gold, US dollars, 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.
The issuers of stablecoins publish periodic reserve attestation reports that are certified by third-party audit companies that perform an independent review to verify that each unit is adequately backed by collateral that has been 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.
Tether, the biggest stablecoin market cap, was penalized by the US for lying about its reserves in 2021.
The algorithmic stabilitycoin collapse was also a factor in the crash of Terra’s Terra ecosystem in May 2022. The fall in the price of Terra (LUNA), due to TerraUSD’s failure to maintain its peg against the US dollar, was also a result.
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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