S&P Global Ratings is bringing stablecoin stability ratings directly to blockchain through a partnership with decentralized oracle network Chainlink.
According to a press release shared with CoinDesk, the integration will allow decentralized finance protocols, smart contracts, and financial platforms to access S&P’s stablecoin risk ratings in real-time.
Ratings rate stablecoins with a score from 1 to 5 based on their ability to maintain a stable value compared to fiat currencies.
Asset quality, liquidity, redemption mechanisms, regulatory status, and governance are considered. S&P currently rates 10 stablecoins, including USDT, USDC, and Sky Protocol’s USDS/DAI.
Unlike credit ratings, ratings are designed to measure operational and structural stability. Having a DeFi platform on-chain allows you to automatically reference S&P risk ratings without off-chain data feeds or manual updates.
The service uses Chainlink’s DataLink infrastructure, which allows traditional data providers to publish to the blockchain without building new systems. The data will initially start on Ethereum’s Layer 2 network, Base, and will be expanded further based on demand.
The move comes as the stablecoin market’s market capitalization reached $305 billion, up from $130 billion a year ago, according to data from DeFiLlama.
S&P Global has increased its activity in the cryptocurrency space since 2021, launching a cryptocurrency index and publishing risk ratings for tokenized funds and DeFi protocols. The first-ever credit rating for a DeFi protocol was assigned in August.
