Finst

First credit rating for stablecoin issuer Sky

S&P Global Ratings has awarded crypto giant Sky (formerly Maker) a credit rating of B- with a stable outlook.

By Mike Hesp
• 2 min read
First credit rating for stablecoin issuer Sky

S&P Global Ratings has awarded crypto giant Sky (formerly Maker) a credit rating of B- with a stable outlook to Sky. It’s a first: a major traditional financial ratings agency has never before rated a DeFi protocol.

Sky, built on Ethereum, is the issuer of the USDS stablecoin, which, with a market cap of $7.1 billion, ranks fourth globally behind USDT, USDC, and USDe.

Jonathan Manley, Global Head of Market Outreach at S&P, called the rating “a significant milestone” that could help bring more transparency to the DeFi sector. S&P is expanding its coverage of blockchain-based financial products and has recently also reviewed tokenized Treasury Funds and mortgage-backed securities structured with blockchain.

In the separate Stablecoin Stability Assessment, S&P evaluates USDS’s ability to maintain its peg to the U.S. dollar on a five-point scale with a score of 4 (limited).

According to S&P, the main risks are:

  • Mass withdrawals by users that exceed available liquidity
  • Credit losses that exceed the available capital

On July 27, Sky had a risk-adjusted core capital ratio of just 0.4%, according to the assessment, indicating a limited buffer to absorb potential losses. S&P also notes a high concentration of large depositors, centralized management, dependency on the founder, and regulatory uncertainty.

The Stablecoin Stability Assessment was launched by S&P in December 2023. For comparison: Circle scores 2 (strong), while Tether — like Sky — sits at 4 (limited).

With this milestone, it’s further proof of how tightly intertwined traditional finance and the crypto market have become.

Disclaimer: This content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. The information provided may be incomplete, inaccurate, or outdated and should not be relied upon as such. Nothing on this website should be considered a recommendation to buy, sell, or hold any cryptocurrency. Investing in crypto-assets involves risk of loss.