S&P Global Ratings finds majority of stablecoins meet stability benchmarks

The assessments, which categorize digital assets on a scale from 1 (very strong) to 5 (weak), reflect a nuanced landscape for stablecoin stability. Mohamed Damak, a digital assets analyst at S&P Global Ratings, noted that while half of the evaluated assets show improvement, the remaining divergence between top-tier coins and those rated as weak remains a concern for market participants. Over the last nine months, the firm downgraded two of its 11 assessments, signaling ongoing volatility in how these assets manage liquidity and reserve transparency.

S&P Global Ratings evaluates these assets based on underlying credit, market, and custody risks, alongside the robustness of liquidation mechanisms. The current standings highlight a clear divide: high-performing assets like Euro Coin (EURC), USD Coin (USDC), and the Global Dollar (USDG) hold strong ratings of 2, while others such as Tether (USDT), TrueUSD (TUSD), and Ethena USD (USDe) languish at the bottom of the scale with a 5. These ratings incorporate broader operational factors, including governance, regulatory frameworks, and third-party technology dependencies, ensuring a comprehensive view of whether an issuer can truly back its digital tokens during periods of market stress.