Moody's proposes a new framework for stablecoin ratings, focusing on the quality of reserve assets.

Moody's has released a new stablecoin rating framework recommendation, emphasizing the credit quality, market value risk, and operational risk assessment of stablecoin reserve assets. This framework means that even two stablecoins pegged 1:1 to the US dollar may have different ratings depending on the type of reserve assets they represent. Moody's states that the rating process will be two-step: first, assessing the credit quality of the various assets in the reserve pool and related counterparties; second, estimating market value risk based on asset class and maturity, and setting "advance rates" for different assets. It will also incorporate factors such as the stablecoin's operational, liquidity, and technological risks. The report points out that issuers must effectively segregate stablecoin reserve assets from other business operations to ensure that these assets are used solely for redeeming stablecoins in the event of issuer bankruptcy.