Moody’s Introduces AI-Driven Service for Anticipating Stablecoin Depegging

Moody’s Analytics Launches Stablecoin Service Using AI

Moody’s Analytics has announced the launch of its new stablecoin service, Digital Asset Monitor, which utilizes artificial intelligence (AI) to predict potential depeggings within a 24-hour timeframe. The service also provides real-time insights into the liquidity and stability of stablecoin issuers.

Stability in the Stablecoin Market

In a November 6 announcement, Moody’s observed that the stablecoin market is becoming more stable with the introduction of Digital Asset Monitor.

In 2023, there have been a total of 1,914 depeggings, out of which 609 were from large-cap stablecoins backed by fiat. This is a decrease compared to 2022, which saw a total of 2,847 depeggings, including 707 from large-cap stablecoins. Moody’s notes that while some correlation can be seen with rising interest rates, there are also coin-specific factors contributing to depeggings.

The Tracking Scope

Digital Asset Monitor will track 25 fiat-backed stablecoins that represent over 92% of the total stablecoin market capitalization. Notable stablecoins included in the tracking are Tether (USDT), USD Coin (USDC), and PayPal Coin (PYUSD). The service plans to incorporate more stablecoins in the future.

Features and Insights

Besides predicting depegging risks, Digital Asset Monitor will provide information on various aspects including market and liquidity dynamics of stablecoins, stability of issuers, custodians holding the assets, and the quality of reserves. It will also offer a transparency index to highlight the disclosure quality of entities behind fiat-backed stablecoins.

Hot Take: Moody’s Analytics Enhances Stability Monitoring of Stablecoin Market

Moody’s Analytics has introduced Digital Asset Monitor, a new stablecoin service that leverages AI to forecast depeggings within a 24-hour period. The service aims to enhance stability in the stablecoin market by providing real-time insights into liquidity and stability while tracking the top 25 fiat-backed stablecoins. In addition to identifying depegging risks, Digital Asset Monitor offers information on market and liquidity dynamics, issuer stability, custodians, and reserve quality. This service is expected to contribute to the ongoing development and transparency of the stablecoin ecosystem.