Bluechip looks at numerous factors, including how well a stablecoin has historically held its peg, how transparent its governance is, and the quality of its management, among other things. In 2021, the US Commodities and Futures Trading Commission fined Tether $41 million for making untrue or misleading statements about the reserves backing its flagship dollar-pegged stablecoin.īut it’s not just audits that can make or break a stablecoin’s rating.

Tether has long struggled to convince the crypto community it holds reserves one-to-one for its $83 billion tokens. NOW READ: ‘Tether is next’ says short seller who bet against Silvergate and Signature Bank “When it comes to Tether, what ends up holding the rating down to a fairly low level is the lack of an audit - the fact that people can’t be credibly convinced of its reserve plans,” Jones said. Tether, currently the biggest stablecoin by market cap and deployed across 14 different blockchains, as well as TrueUSD and Frax, all received a D grade, indicating that they are “unsafe.” “It’s really the audit that’s the most important single factor holding back Tether.” And if claims are opaque, we’re erring on the side of caution and distrust,” Garett Jones, Bluechip’s chief economist, told DL News in an interview. “One of the hallmarks of our rating system is that we favour transparency. On the other end of the spectrum, Bluechip gave USDD, a stablecoin with connections to the Tron blockchain and its founder Justin Sun, a failing F grade.Įxplaining the grade, Bluechip said it believes that “USDD’s reserves are commingled with assets of Huobi,” and strongly recommend users not to use it. No stablecoin earned the top A+ indicating it is “highly stable.” However, four stablecoins - Binance USD, Liquity USD, Pax Gold, and Gemini Dollar - received an A, the second-best grade. NOW READ: Investors pull $4bn from Binance as regulators and rivals close in But Bluechip uses more familiar US school grading instead of bond ratings - assigning letter grades to stablecoins ranging from A+, the highest possible grade, to a failing grade of F. The agency - a non-profit called Bluechip - wants to offer a reliable resource for crypto investors to understand the relative safety of the different pegged assets that power much of the crypto industry.īluechip works similarly to Wall Street rating agencies such as Standard & Poor’s and Moody’s, which provide ratings for various investment products.

Tether, the largest stablecoin by market cap, received a D due to its lack of an audit.Ī new stablecoin rating agency just released a ranking of top 15 stablecoins.In its inaugural report, no stablecoin earned the top A+ grade, but four got an A.New non-profit Bluechip will grade stablecoins from A+ to F.

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