In a significant move for the cryptocurrency sector, Moody”s has announced a new framework aimed at evaluating the solvency of stablecoins. This initiative will focus on the credit quality of the assets backing these digital currencies, marking an important step in the integration of stablecoins into traditional financial systems.
The methodology introduced by Moody”s differentiates stablecoins that are pegged 1:1 to fiat currencies, taking into account various factors such as market risk, liquidity, and the underlying technology of their reserves. This structured approach is designed to enhance transparency in a rapidly growing market that is approaching wider institutional adoption, particularly in the United States.
Moody”s clarified that its assessment will result in distinct ratings for stablecoin obligations, highlighting that two tokens may maintain the same dollar peg yet receive different risk ratings depending on the quality of their reserve assets. This differentiation is crucial as it could significantly influence investor confidence and regulatory scrutiny.
The framework proposed by Moody”s comprises two essential steps. The initial phase consists of evaluating the solvency of reserve assets by utilizing existing credit ratings of those assets and their associated counterparties. Subsequently, the methodology will factor in market value considerations, assessing the risk associated with each reserve asset based on its classification and maturity.
Before finalizing any ratings, Moody”s will also take into account operational risks, liquidity risks, and technology risks linked to the stablecoins. This comprehensive approach aligns with the recent U.S. GENIUS Act, which mandates stablecoin issuers to maintain highly liquid reserves, such as insured bank deposits and U.S. Treasury Bills. This requirement reflects an increasing demand for transparency in the crypto space, a point of contention for Tether, the largest stablecoin issuer.
Despite Tether”s ongoing efforts to bolster transparency—such as disclosing a total exposure to U.S. Treasury Bills of $135 billion—the new standards set forth by Moody”s are expected to intensify scrutiny of stablecoin reserves. Ultimately, the proposed rating methodology will necessitate the effective segregation of assets, ensuring they are exclusively allocated to meet stablecoin obligations, even in the event of an issuer”s bankruptcy.
Market participants will have the opportunity to comment on Moody”s proposed system until January 26, 2026, a date that marks a pivotal moment in the regulatory evolution of the stable asset market.
