Moody's Analytics Unveils AI-based Stablecoin Service for Real-time Insights
Summary:
Moody’s Analytics is introducing a new stablecoin service leverages AI to anticipate possible depeggings within a day and provide real-time data on stablecoin issuers' liquidity and stability. The service, Digital Asset Monitor, will track 25 major fiat-backed stablecoins, accounting for over 92% of the total stablecoin market capitalization. The service also features a transparency index to emphasize the disclosure quality of entities tied to these stablecoins.
Introducing their latest stablecoin service, Moody’s Analytics will employ artificial intelligence to predict possible depeggings within a day's notice and offer live updates on the liquidity and solidity of stablecoin issuers. According to Moody’s announcement on November 6, the stablecoin market is becoming increasingly more stable, as indicated by their new product, Digital Asset Monitor. To date in 2023, there have been 1,914 depeggings, including 609 from large-cap stablecoins backed by fiat money. This count is less than those in 2022 which totaled 2,847 including 707 large-cap instances. While there seems to be some link to surging interest rates, there are also coin-specific reasons contributing to this, highlights Moody’s.
The Moody's Digital Assets Monitor (DAM) will observe 25 major fiat-backed stablecoins that account for over 92% of total stablecoin market capitalization, such as Tether (USDT), USD Coin (USDC), and PayPal Coin (PYUSD). Moving forward, more stablecoins will continually join the tracking service, as indicated on their website, where it is described as a machine learning model which uses a combination of on and off chain data, financial statements, and economic indicators.
In addition to predicting depegging risks, the tracking service will also provide insight into the market and liquidity dynamics of the stablecoin, the solidity of the stablecoin issuer, the custodians that manage the assets of the stablecoin, and the grade of these reserves. Additionally, it will feature a "transparency index" to emphasize the disclosure quality by the entities linked with these fiat-backed stablecoins.
Yiannis Giokas, the senior director of product innovation at Moody’s Analytics, proclaimed in the announcement that "the tool was constructed within a year using agile-development frameworks to cater to client demands." In contrast to 2023's 609 depeggings reported by Moody's Analytics for large fiat-backed stablecoins, the number was 707 in 2022 showing slight improvement.
The inception of the news that Moody's Analytics was creating this innovative service happened at the outset of the year. Moody’s Analytics, distinct from Moody’s Ratings, frequently provides observations on various facets of the crypto assets market.
Published At
11/7/2023 12:35:05 AM
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