Moody’s is developing a scoring system for up to 20 stablecoins, as reported by Bloomberg. The proposed system will analyze the coins based on the quality of attestations regarding the reserves that back them; however, it will not serve as an official credit rating.
Stablecoins are designed to maintain less volatility compared to cryptocurrencies like Bitcoin, as they are typically pegged to another asset, most commonly the US dollar. To support this peg, issuers generally hold reserves of the corresponding asset equivalent to the tokens in circulation.
Concerns have been raised regarding the actual backing of these stablecoins. For instance, Tether, which has $67 billion worth of dollar-pegged stablecoins in circulation, faced a fine from US authorities in 2021 for misrepresenting its reserves, according to Bloomberg.