S&P Global Brings Stablecoin Risk Scores Onchain Through Chainlink

What Happened

S&P Global Ratings is bringing its stablecoin stability assessments directly to blockchains through a partnership with decentralized oracle network Chainlink.

The service uses Chainlink’s DataLink infrastructure, which allows traditional data providers to publish to blockchains without building new systems. The data will initially launch on Base, an Ethereum layer 2 network, with further expansions based on demand.

S&P Global has increased its activity in the crypto space since 2021, launching crypto indices and issuing risk assessments for tokenized funds and DeFi protocols. Its first-ever credit rating to a DeFi protocol was assigned back in August.

Market Context

They factor in asset quality, liquidity, redemption mechanisms, regulatory status and governance. S&P currently evaluates 10 stablecoins, including USDT, USDC and Sky Protocol’s USDS/DAI.

The move comes as the stablecoin market hit $305 billion in capitalization, up from $130 billion a year earlier, according to data from DeFiLlama.

Why It Matters

The integration allows decentralized finance protocols, smart contracts and financial platforms to access S&P’s risk evaluations of stablecoins in real time., according to a press release shared with CoinDesk.

Unlike credit ratings, the assessments are designed to measure operational and structural stability. By placing them onchain, DeFi platforms can reference S&P’s risk assessments automatically, without offchain data feeds or manual updates.

Details

The assessments score stablecoins from 1 to 5 based on their ability to maintain a stable value relative to fiat currencies.