The rating agency has started rating cryptocurrencies. In particular, it dealt with the case of USDT, the largest stablecoin on the market, whose structure is worrisome in the eyes of S&P.
A new reliability test for cryptocurrencies, now under the supervision of rating agencies. The S&P agency wants to try to define a financial rating for some of them. So she looked at the most solid, stablecoins, these cryptocurrencies backed mainly by the dollar. But even that is not simple: the S&P agency wants to consider the stability, the soundness of this system, but also the capacity of the ecosystem to secure it with fixed assets.
For example, it took a close look at USDT, the world’s largest dollar-backed stablecoin, with a capitalization of $90 billion. Rather, the risks to consider are the financial structure of its parent company, Tether. In particular, the organization into international entities and holding companies, some of which are based in tax havens.
Poor rating of USDT
Although its stablecoin is backed almost entirely by tangible assets, which are mostly US Treasuries, it is difficult for S&P to reliably and clearly locate them. The agency notes that the organization into dispersed entities damages the robustness of the ecosystem and could pose serious regulatory problems in the future.
Hence a poor rating of 4 out of 5 for USDT. S&P heavily favors USDC, the Circle group’s cryptocurrency, which benefits from a rating of 2 out of 5. Note that none of the 8 stablecoins currently surveyed by S&P benefits from a perfect rating of 1.