Moody’s proposes stablecoin ratings framework focused on reserve quality

Top credit ratings agency Moody's is proposing a new framework for evaluating stablecoins as the digital assets edge their way into traditional finance.

"We would assess the creditworthiness of and assign ratings to stablecoin obligations," Moody's said Friday. "We propose to first evaluate each eligible type of asset in the pool of reserves backing a stablecoin, and we propose to assess the asset’s credit quality by using the rating of the asset and of associated counterparties."

Moody's framework would mean in practice that two USD-pegged tokens claiming 1:1 backing could receive different ratings based on the assets used to back the stablecoins. The agency's proposal comes as many financial institutions are on the verge of further embracing or scaling stablecoin use, especially in the U.S.

"The second step of our proposed analysis would address market value considerations by estimating the market value risk of each eligible reserve asset depending on its type and maturity," Moody's said. "The analysis would result in advance rates that would apply to the value of each type of asset. We further propose to consider a stablecoin’s operational risk, liquidity risk, technology risk and other considerations to arrive at the assigned rating."

Tether's reserves

Notably, Tether, issuer of USDT, the world's largest stablecoin by supply, has in the past drawn some scrutiny based on the level of transparency it maintains when it comes to the reserves it holds to back its stablecoin. The company has made significant efforts to assuage market concerns. Tether plans to soon launch a stablecoin specifically for the U.S. market.

In October, Tether said its total exposure to U.S. Treasuries reached $135 billion.

The recently passed GENIUS Act, the U.S. government's framework for stablecoins, asserted that issuers must hold highly liquid reserves to back their stablecoins, including secure assets such as deposits held at insured banks and U.S. Treasury bills.

Moody's submitted a detailed proposal on Friday, breaking down how it would assess stablecoins.

The agency said its "cross-sector rating methodology" would apply "globally to stablecoins where the issuer’s stablecoin activities, including issuing and maintaining the stablecoin and holding and managing assets sufficient to back the stablecoin, are effectively segregated from any other."

"We refer to the stablecoin’s effectively segregated assets as reserve assets," Moody's added. "Effective segregation means that reserve assets can only be used to satisfy stablecoin obligations, including in a situation of a bankruptcy of the stablecoin issuer or its affiliates."

Moody's is asking market participants to comment on its proposed system by Jan. 26, 2026.