Moody's proposes a new stablecoin rating framework, focusing on reserve asset quality

GoldMoney reports that Moody’s has released a new stablecoin rating framework proposal, which emphasizes the credit quality of stablecoin reserve assets, market value risk, and operational risk assessment. The framework implies that even two stablecoins both pegged 1:1 to the US dollar may have different ratings due to differences in the types of reserve assets backing them. Moody’s stated that the rating process will involve two steps: first, assessing the credit quality of various assets in the reserve pool and the related counterparties; second, estimating market value risk based on asset categories and maturities, and setting “advance rates” for different assets. It will also incorporate factors such as operational, liquidity, and technical risks of the stablecoin. The report points out that issuers must effectively segregate stablecoin reserve assets from other business activities to ensure these assets remain dedicated solely to the redemption of stablecoins in the event of issuer bankruptcy.