S&P Evaluates Stablecoins for the First Time, Marking a Significant Milestone for the Industry

S&P Global Ratings has recently turned its attention to the stablecoin market, conducting its first comprehensive assessment of eight mainstream stablecoins. This move is seen by industry insiders as an important milestone in the development of the cryptocurrency sector, marking the beginning of traditional financial institutions recognizing the significance of this emerging asset class.

A senior analyst at S&P Global Ratings stated that the company's responsibility is to find ways to reduce market information asymmetry. As a rapidly growing sector, the company is investing significant resources into research on cryptocurrency.

However, in this assessment, some well-known stablecoins did not score well. The largest by market capitalization and highest in trading volume, USDT, received only the fourth lowest score on a scale of 5. At the same time, DAI and TrueUSD, which are popular in the decentralized finance (DeFi) space, also received relatively low ratings.

Nevertheless, industry insiders generally believe that the attention of traditional rating agencies like S&P to stablecoins is a positive signal, indicating that these digital assets have gained sufficient importance. The co-founder of venture capital firm Castle Island Ventures pointed out that this is an important advancement in the process of normalizing stablecoins.

S&P's report may serve as a reference for some Wall Street institutions attempting to enter the stablecoin market. However, some industry insiders have expressed doubts about the expertise of traditional rating agencies in this emerging field. A professor at Columbia Business School believes that S&P has not brought much value in assessing new developments.

It is worth noting that S&P emphasizes that its ratings are not endorsements or condemnations of any specific product, but rather a relative ranking aimed at assessing the likelihood of stablecoins maintaining their peg to the US dollar. The ratings use a scoring system of 1 to 5, rather than the traditional AAA to D ratings.

S&P stated that the rating is based solely on publicly available data and has not directly communicated with or obtained non-public information from the stablecoin issuer. This approach reflects the transparency advantages of blockchain while also exposing the issue of information asymmetry in the cryptocurrency space.

In any case, S&P's assessment undoubtedly validates the importance and influence of the stablecoin industry. Although the rating agency emphasizes that this is merely a "view," the results of its assessment are likely to impact the decision-making of institutional investors, especially those public companies and well-known institutions that need to be accountable for their investment actions.

As traditional financial giants gradually enter the cryptocurrency space, the development of the stablecoin market will face more challenges and opportunities. This assessment by S&P may just be the beginning, and in the future, more traditional financial institutions may participate in the evaluation and research of crypto assets, promoting the entire industry towards a more standardized and mature direction.