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One of the three largest credit rating agencies is reportedly working on a rating system for cryptocurrencies pegged to other assets, such as US dollars, 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 endorsement of reserves it supports.
Stablecoin issuers regularly issue reserve attestation reports certified by third-party auditing firms that perform independent reviews to ensure that each stablecoin unit is adequately backed by collateral held in reserve.
Moody’s is developing a valuation system amid growing interest in stablecoins, sparking concern from regulators and investors, according to the report.
In 2021, US authorities fined Tether, the largest stablecoin issuer by market cap, for lying about its reserves.
The collapse of the Terra ecosystem in May 2022 has also been linked to the collapse of its algorithmic stablecoin. Terra (LUNA) prices plummeted after TerraUSD (UST) failed to defend its peg against the US dollar.
A person with knowledge of Moody’s new stablecoin rating system said the project was in its early stages and would not represent an official credit rating.
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