In a significant development for the cryptocurrency market, Moody’s Analytics has unveiled the Digital Asset Monitor (DAM), an innovative service utilizing artificial intelligence to forecast potential depeggings of stablecoins. This service, which was constructed using agile-development techniques over a year, provides crucial 24-hour forecasts on the stability of major stablecoins, a key concern for investors and financial institutions.
The DAM tracks the performance of 25 fiat-backed stablecoins, which collectively comprise over 92% of the stablecoin market’s total capitalization, including widely recognized names such as Tether (USDT), USD Coin (USDC), and PayPal Coin (PYUSD). The service not only predicts depegging events but also offers insights into the market and liquidity dynamics, the issuer’s stability, and the custodians of the assets.
Moody’s report indicates that the stablecoin market is becoming more stable over time, despite a recorded 1,914 depegging events in 2023, down from 2,847 in the previous year. The service aims to further this stability by providing a transparency index that sheds light on the quality of disclosures by entities behind fiat-backed stablecoins.
DAM’s launch is timely as it addresses growing demands for clarity and risk management in the crypto space. It stands as a testament to Moody’s Analytics’ commitment to offering regular commentary and sophisticated tools to navigate the complexities of crypto assets. As the market evolves, the service is set to expand, incorporating more stablecoins and enhancing the robustness of its predictions.
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