Key Highlights
- S&P Global Ratings is bringing its independent Stablecoin Stability Assessments (SSAs) on-chain for the first time through a collaboration with Chainlink
- The on-chain SSAs provide real-time risk evaluations on a scale of 1 to 5
- This initiative meets a critical need for transparency and risk management as stablecoin market capitalization grows and new federal regulations are established
In the latest press release, S&P Global has announced an impressive partnership between its ratings division and Chainlink, a leading oracle platform.
This partnership will deliver S&P Global Ratings’ Stablecoin Stability Assessments directly onto blockchain networks, according to the press release. This transfer of data will be made through DataLink, a service powered by the Chainlink data standard that is developed for institutional purposes.
For the first time, this initiative allows the deep and independent risk analysis of stablecoins from S&P Global Ratings to be directly used within decentralized finance protocols and automated smart contracts.
On-Chain Access to Critical Risk Evaluations With Chainlink
The on-chain Stablecoin Stability Assessments provide real-time access to S&P’s evaluations. It is very important to understand that these are not formal credit ratings. Instead, they rank stablecoins on a scale from 1, which means very strong, to 5, which means weak.
The ranking is based on the stablecoin’s ability to keep its value steady compared to traditional government-issued currencies. As more large institutions begin using digital assets, having instant access to trusted risk assessments directly within the blockchain system has become essential.
This new service allows DeFi platforms, lending services, and institutional investors to build S&P’s analytical risk assessments directly into their automated systems.
Chuck Mounts, the Chief DeFi Officer at S&P Global, stated that “The launch of SSAs on-chain through Chainlink underscores our commitment to meeting our clients where they are. By making our SSAs available on-chain through Chainlink’s proven oracle infrastructure, we’re enabling market participants to access our assessments seamlessly using their existing DeFi infrastructure, enhancing transparency and informed decision-making across the DeFi landscape.”
Sergey Nazarov, Co-Founder of Chainlink, also expressed his excitement on this partnership, “I’m very excited that S&P Global Ratings is leveraging Chainlink to bring its Stablecoin Stability Assessments on-chain for the first time, empowering the world’s largest institutions to adopt stablecoins at scale.”
He added more, “By making its SSAs available on-chain, Chainlink enables S&P to extend its reach directly into the digital asset economy. S&P Global Ratings is one of the world’s most trusted providers of credit ratings, relied upon by the largest banks, asset managers, and governments. This unlocks a critical framework for institutions adopting stablecoins at scale, enabling a more secure and compliant foundation for digital markets.”
Boom in the Stablecoin Market
This collaboration uses Chainlink’s infrastructure, which has supported most of the on-chain economy for over 5 years. According to the press release, the network has enabled over $25 trillion in transaction value and currently secures nearly $100 billion in DeFi Total Value Locked.
Chainlink also has a strong history of working with major financial institutions such as Swift, J.P.Morgan, Fidelity, and Mastercard.
The on-chain stablecoin assessment will first become available on Base, an Ethereum Layer 2 blockchain incubated by Coinbase. Plans are in place to expand to other networks based on market demand and user feedback.
This launch is taking place at a crucial time as the stablecoin market has grown significantly in recent months. The reason behind this is recent developments from the regulatory side. According to CoinMarketCap, the total market capitalization has reached $314.74 billion at the time of writing. This is approximately $186 billion just a year ago.
Furthermore, the recent signing of the GENIUS Act into law in the United States has created the first federal regulatory framework for stablecoins, providing much-needed clarity for institutional players.
The latest report suggests that a group of major financial institutions, including JPMorgan, Citibank, Goldman Sachs, and others, is in the process of launching a joint stablecoin.
The availability of S&P’s on-chain assessments further supports market participants as they develop easy-to-use DeFi solutions that meet the high-risk management standards required by regulated institutions to move large amounts of capital on-chain.
