S&P Global Ratings deems Mountain Protocol's USDM as 'adequate' in new Stablecoin Stability Assessment report

Quick Take

  • S&P Global Ratings ranked USDM’s ability to maintain its peg as “adequate.”
  • The firm looks at numerous criteria to determine this rating, including market risk, reserve funds, robustness of its liquidation method and others.
  • S&P Global Ratings scored other stablecoins such as USDC as “strong” and Tether as “constrained.” 

S&P Global Ratings has issued its ninth Stablecoin Stability Assessment, this time focusing on Mountain Protocol's yield-bearing stablecoin USDM.

The assessment evaluates a stablecoin's capacity to sustain its peg, with USDM receiving a rating of 3, indicating "adequate" performance according to the firm's criteria.

S&P Global Ratings assesses numerous aspects of the stablecoin, including credit risk, market risk, custody risk, reserve funds, robustness of its liquidation mechanism and available overcollateralization. Additional factors such as governance, regulatory frameworks and third-party dependencies are also considered. The firm then scores these criteria between 1 for “very strong” and 5 for “weak.” 

Other stablecoins previously assessed include USDC at 2 (strong), Tether at 4 (constrained) and DAI at 4 (constrained). 

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