According to a business insider familiar with the plans, the global ratings agency Moody's is developing a mechanism to rate up to 20 most popular stablecoins based on the reliability of their reserve attestations.
A different source told Bloomberg that the project is still in its early stages and won't be providing formal credit ratings.
Stablecoin resilience and if they're backed by a trustworthy bank account are perennial problems in the cryptocurrency space. The purpose of stablecoins is to closely mirror the value of another asset, frequently the US dollar. Therefore, in principle, there should be $10 billion available to back up a stablecoin if investors have invested, say, $10 billion in it.
Concern that Tether's USDT, the largest stablecoin, has not been fully backed has followed it for years. Tether was ordered to pay $18.5 million in fines in 2021 after New York State determined that the company had misrepresented the fact that its stablecoin was fully backed 1:1 by U.S. dollars.
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