S&P Global uses Chainlink to assess the stability of stablecoins in maintaining their peg.

CN
7 hours ago

S&P Global Ratings has partnered with blockchain oracle provider Chainlink to offer on-chain access to its new stablecoin stability assessments for financial institutions, which provide ratings based on each stablecoin's ability to maintain its peg.

Stablecoin Stability Assessments (SSAs) launched on the Ethereum Layer 2 network Base on Tuesday. S&P Global and Chainlink stated in a release that there is potential for expansion to other blockchains, depending on market demand and client feedback.

SSAs will be supported by DataLink—an institutional-grade data publishing service provided by Chainlink—enabling S&P Global Ratings to provide risk assessments for stablecoins based on each stablecoin's ability to maintain stable value relative to fiat currency, rated on a scale of 1 (very strong) to 5 (weak).

Chainlink CEO Sergey Nazarov stated that this is the first time S&P Global Ratings—an institution that assesses the creditworthiness of S&P 500 companies and many others—has offered direct on-chain access for use by DeFi protocols.

"S&P Global Ratings is one of the most trusted credit rating providers in the world, relied upon by the largest banks, asset management firms, and governments," Nazarov added. "This unlocks a critical framework for institutions to adopt stablecoins at scale, providing a safer and more compliant foundation for digital markets."

According to estimates from the U.S. Treasury in April, the stablecoin market recently surpassed $300 billion and is expected to reach $2 trillion by 2028.

With the GENIUS Act establishing a regulatory framework for stablecoins, the demand for real-time risk profiles may increase, enabling institutions to make more informed data-driven decisions regarding stablecoin investments.

For example, USDC is a fiat-backed stablecoin fully collateralized by U.S. dollars and U.S. Treasury bonds, while Ethena USDe (USDe) is an algorithmic stablecoin that maintains its peg through cryptocurrency-based collateral and on-chain mechanisms rather than cash reserves.

Many stablecoins rely on blockchain oracles (like Chainlink) to provide accurate, tamper-proof price data and other external inputs, helping to maintain their peg and support smart contract functionality.

Last Friday's market crash highlighted the importance of oracles, as USDe briefly fell to $0.65 on Binance due to its reliance on a thinly traded order book rather than external oracle price feeds.

S&P Global Ratings' collaboration adds another project to Chainlink's traditional finance partnerships, which have previously included collaborations with Swift, Euroclear, JPMorgan, Fidelity, UBS, and Mastercard.

Even the U.S. government utilized Chainlink in late August to publish economic data on-chain as part of efforts to enhance transparency in government spending.

According to Chainlink data, Chainlink continues to dominate the on-chain oracle market, having facilitated over $25 trillion in transaction value while actively securing nearly $100 billion in total locked value in DeFi.

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Original article: “S&P Global Taps Chainlink to Rate Stablecoins’ Ability to Retain Peg”

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