S&P Global Ratings deems Mountain Protocol's USDM as 'adequate' in new Stablecoin Stability Assessment report

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Quick Take

S&P Global Ratings ranked USDM’s ability to maintain its peg as “adequate.”
The firm looks at numerous criteria to determine this rating, including market risk, reserve funds, robustness of its liquidation method and others.
S&P Global Ratings scored other stablecoins such as USDC as “strong” and Tether as “constrained.”

S&P Global Ratings has issued its ninth Stablecoin Stability Assessment, this time focusing on Mountain Protocol's yield-bearing stablecoin USDM.

The assessment evaluates a stablecoin's capacity to sustain its peg, with USDM receiving a rating of 3, indicating "adequate" performance according to the firm's criteria.

S&P Global Ratings assesses numerous aspects of the stablecoin, including credit risk, market risk, custody risk, reserve funds, robustness of its liquidation mechanism and available overcollateralization. Additional factors such as governance, regulatory frameworks and third-party dependencies are also considered. The firm then scores these criteria between 1 for “very strong” and 5 for “weak.”

Other stablecoins previously assessed include USDC at 2 (strong), Tether at 4 (constrained) and DAI at 4 (constrained).

"We are thrilled with the overwhelmingly positive market reception to our Stablecoin Stability Assessment and are excited to expand our coverage to include USDM," said "Chuck Mounts, Chief DeFi Officer at S&P Global Ratings, in a statement. "We remain committed to enhancing transparency and insights in the rapidly evolving world of decentralized finance.”

Mountain Protocol launched USDM in early September 2023 and was licensed by the Bermuda Monetary Authority. USDM is an ERC-20 token fully backed by short-term U.S. Treasuries. It gives holders a daily yield using a rebasing mechanism, with an algorithm to help maintain the token's price, and was characterized by Mountain as being "very similar to Lido Finance's stETH."

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MK Manoylov has been a reporter for The Block since 2020 — joining just before bitcoin surpassed $20,000 for the first time. Since then, MK has written nearly 1,000 articles for the publication, covering any and all crypto news but with a penchant toward NFT, metaverse, web3 gaming, funding, crime, hack and crypto ecosystem stories. MK holds a graduate degree from New York University's Science, Health and Environmental Reporting Program (SHERP) and has also covered health topics for WebMD and Insider. You can follow MK on X @MManoylov and on LinkedIn.