Rating Agencies Assess Stablecoins for the First Time: Market Acceptance or Overregulation?

S&P Global Ratings recently turned its attention to the stablecoin market, conducting its first comprehensive assessment of eight major stablecoins. This move has garnered widespread attention in the market, being seen as both an acknowledgment of the stablecoin industry and a source of some controversy.

S&P senior analysts stated that the company has been committed to reducing market information asymmetry, and cryptocurrencies, as a rapidly growing sector, are a key focus for them. However, the results of this assessment were not satisfactory. The largest and most traded stablecoin USDT received a low rating, and some popular DeFi stablecoins such as DAI and TrueUSD also scored poorly.

Nevertheless, some industry insiders believe that the mainstream rating agencies' increasing attention to stablecoins is a positive sign. This indicates that stablecoins have become an important financial tool that cannot be ignored, regardless of whether they represent true technological advancement.

Reactions in the industry to the rating results are mixed. Some believe that traditional rating agencies may lack a deep understanding of the emerging crypto space, making it difficult to provide accurate assessments. Others point out that native crypto users may not care much about these ratings; they prioritize convenience and regulatory flexibility when choosing stablecoins.

It is worth noting that S&P emphasizes that these ratings are not investment advice, but rather a forward-looking assessment of the likelihood of stablecoins maintaining their peg to the dollar. The ratings use a scale of 1 to 5, rather than the traditional letter rating system. S&P states that the current five-point scoring is sufficient to differentiate between different stablecoins, and more detailed scoring may imply a non-existent precision.

The rating process only uses publicly available data and does not directly communicate with or obtain non-public information from stablecoin issuers. This reflects the transparency of blockchain to some extent, but also exposes the limitations of information disclosure in the cryptocurrency field.

Regardless, the S&P's ratings of stablecoins will undoubtedly have an impact on the market. While the effect on retail traders may be limited, these ratings could influence the decisions of institutional investors and publicly traded companies. As the stablecoin market continues to evolve, balancing innovation with regulation, and transparency with trust, will be a persistent challenge for the industry.