The scoring system will analyze up to 20 stablecoins.
Moody’s Corp. is developing a scoring system for stablecoins, the most popular cryptocurrency tokens, as the asset class grows and faces increased scrutiny from regulators and investors.
The system will analyze up to 20 stablecoins based on the attestation quality of the reserves backing them.
The internal project remains at an early stage of development.
Stablecoins are digital tokens with a one-to-one value with a less volatile asset, typically the US dollar and their issuers keep at least the equivalent amount of that asset in reserve.
As token usage has increased and monthly or quarterly attestations are validated by third-party audit firms, stablecoin reserve attestations have come under scrutiny in recent years.
Banks and traditional financial institutions have become more interested in stablecoins as a way to use distributed ledger technology, and some have even decided to create their tokens, such as JPMorgan’s JPM Coin for domestic payments, which debuted in 2019.