# S&P stablecoin stability ratings, explained

> S&P Global Ratings publishes Stablecoin Stability Assessments (SSAs) that score coins on a 1–5 scale based on reserve quality, governance, regulatory compliance, liquidity, and track record. No stablecoin has received a '1 (very strong).' USDC scored '2 (strong)'; USDT scored '4 (constrained).' The scores are not credit ratings and do not predict insolvency — they assess peg stability risk specifically.

5 min read · Updated 2026-06-09 · Topic: stablecoins

Canonical: https://tempo.dataos.so/articles/sp-stablecoin-stability-ratings

S&P Global Ratings — the agency that rates sovereign debt and corporate bonds — publishes a separate analytical product for stablecoins called the **Stablecoin Stability Assessment (SSA)**. The SSA is not a credit rating; S&P is explicit about this distinction. It is a structured opinion on the likelihood that a given stablecoin maintains its peg under stress, published as a numerical score from 1 to 5.

The assessments were first published in December 2023 and have expanded to cover around 10 stablecoins. In October 2025, S&P partnered with Chainlink to deliver the scores on-chain via Chainlink DataLink, making them directly accessible to DeFi protocols.

## The rating scale

| Score | Label | What it means |
|---|---|---|
| **1** | Very strong | Exceptionally low vulnerability to peg loss |
| **2** | Strong | Low vulnerability; reserves and governance sound |
| **3** | Satisfactory | Moderate vulnerability; some reserve or governance concerns |
| **4** | Constrained | High vulnerability; notable weaknesses in one or more pillars |
| **5** | Weak | Very high vulnerability; substantial peg-loss risk |

No stablecoin received a "1 (very strong)" in S&P's initial round of assessments. The highest mark awarded was a "2 (strong)," shared by USDC, Gemini Dollar (GUSD), and Pax Dollar (USDP).

## The five assessment pillars

S&P evaluates each stablecoin across five analytical dimensions:

### 1. Asset quality

This is the primary driver of the final score, according to S&P's own methodology. It examines what the reserves consist of — their credit quality, liquidity, and stability of value — and how quickly those reserves could be liquidated to meet redemptions.

Short-duration US Treasury bills and government money market funds score best. Secured loans, corporate bonds, gold, and cryptocurrency introduce credit, liquidity, and market risk that pull the asset quality score down.

### 2. Governance and management

Who controls the issuer, how decisions are made, and what checks exist on reserve management and operational risk. Formal corporate governance structures, independent board oversight, and internal controls improve this score. Offshore incorporation, opaque ownership, or concentrated control weaken it.

### 3. Regulatory compliance and supervision

Whether the issuer is licensed or registered with financial regulators, in which jurisdictions, and how stringent the applicable regulatory requirements are. US-chartered trust companies (Paxos, Gemini Trust) and SEC-registered entities (Circle) score better here than offshore issuers operating without a formal regulatory license.

The passage of the GENIUS Act in July 2025 and the application of MiCA's stablecoin rules from June 2024 have created clearer benchmarks for this pillar: 1:1 liquid reserves, licensed issuer, and monthly public disclosure.

### 4. Liquidity and redeemability

Can a holder redeem the stablecoin at par, quickly, and without significant friction? This covers redemption terms (minimum amounts, processing time, available channels), whether redemptions are suspended in stress, and the issuer's historical track record on meeting redemptions under pressure.

### 5. Track record

How has the stablecoin performed historically under market stress? Has it maintained its peg during significant crypto market events? Have there been redemption suspensions, reserve shortfalls, or operational failures? A longer history of stable peg maintenance in varied conditions improves this dimension.

## Assessed stablecoin scores

S&P has published assessments for approximately ten stablecoins. The published scores for the major ones:

| Stablecoin | Issuer | S&P SSA Score | Key driver of score |
|---|---|---|---|
| **USDC** | Circle | **2 (Strong)** | Monthly Deloitte attestations, Treasuries + cash only, US-regulated |
| **GUSD** | Gemini Trust | **2 (Strong)** | NYDFS charter, cash and Treasuries, monthly attestation |
| **USDP** | Paxos Trust | **2 (Strong)** | NYDFS charter, cash and Treasuries, monthly Withum attestation |
| **USDT** | Tether | **4 (Constrained)** | Quarterly attestations only, non-Treasury assets, offshore structure, reserve diversity |
| **USDS/DAI** | Sky Protocol | Assessed separately | Crypto-backed component introduces collateral risk |

S&P cited reserve composition opacity, the inclusion of secured loans and other non-liquid assets, offshore regulation, and quarterly-only reporting as the main factors behind USDT's constrained score. The gap between USDC at "2" and USDT at "4" reflects primarily reserve quality and disclosure frequency rather than any claim about solvency.

## What the SSA does not measure

The SSA has specific scope limitations that matter when using it as a due diligence tool:

**It is not a solvency opinion.** S&P is not assessing whether the issuer as a company is financially healthy or likely to remain so. A "2 (strong)" stablecoin from an issuer that becomes insolvent could still fail.

**It does not cover smart contract risk.** Vulnerabilities in the token contract, bridging infrastructure, or on-chain logic are outside the SSA framework.

**It is point-in-time.** An assessment reflects conditions at a review date. Reserve composition, regulatory status, and governance can all change. Updates are periodic, not continuous.

**It does not assess exchange counterparty risk.** Holding a "2 (strong)" stablecoin at an insolvent exchange still exposes users to that exchange's failure.

## How the on-chain delivery works

The October 2025 Chainlink integration allows DeFi protocols to query S&P's SSA scores directly via smart contract. The practical application: a lending protocol could set collateral ratios or borrowing limits based on an on-chain SSA score, or a treasury management contract could restrict holdings to stablecoins above a defined SSA threshold.

This on-chain delivery represents the first time a major traditional ratings agency has made analytic output natively accessible to decentralised applications — a material development for DeFi risk management infrastructure.

## Using the SSA alongside reserve reports

The SSA provides a synthesised view; reserve reports provide the underlying data. The most rigorous approach to stablecoin due diligence combines both:

- Read the reserve report (see [how to read a stablecoin reserve report](/articles/how-to-read-stablecoin-reserve-report)) to understand the current composition
- Check the SSA score to see how an independent third party rates the structural stability
- Review the regulatory status of the issuer in your jurisdiction

For a broader risk framework across all stablecoin types, see [stablecoin risks explained](/articles/stablecoin-risks-explained).

## FAQ

**What does S&P's stablecoin stability assessment score mean?**

S&P rates stablecoins on a scale from 1 (very strong) to 5 (weak), measuring the likelihood that the stablecoin maintains its peg under stress. The score is not a credit rating and does not assess the financial strength of the issuer as a company — only the stability of the peg mechanism and the quality of the assets and governance behind it.

**What score did USDC receive from S&P?**

USDC received a '2 (strong)' — the highest score awarded to any stablecoin in S&P's initial assessments. S&P cited USDC's transparent reserve composition, monthly Deloitte attestations, clear regulatory framework, and reserve concentration in high-quality liquid assets.

**What score did USDT receive from S&P?**

Tether's USDT received a '4 (constrained)' — the second-lowest possible score. S&P cited opacity in reserve composition, the presence of non-liquid assets (secured loans, corporate bonds, gold, Bitcoin), quarterly rather than monthly attestations, and Tether's offshore regulatory structure.

**Are S&P stablecoin assessments available on-chain?**

Yes. In October 2025, S&P Global Ratings and Chainlink announced a collaboration to publish Stablecoin Stability Assessments on-chain via Chainlink DataLink, making the scores accessible to DeFi protocols and smart contracts directly.

**Do the SSA scores update over time?**

S&P reviews and updates assessments periodically, particularly as reserve composition, regulatory status, or governance changes. The assessments are not static — an issuer that improves reserve quality, increases disclosure frequency, or obtains additional regulatory licensing may receive an improved score.

## Sources

1. [S&P Global — Stablecoin Stability Assessment product page](https://www.spglobal.com/ratings/en/products/stablecoin-stability-assessment)
2. [CoinDesk — Tether scores second-lowest rank in S&P assessment (Dec 2023)](https://www.coindesk.com/policy/2023/12/13/tether-scores-second-lowest-rank-in-sp-global-stablecoin-stability-assessment)
3. [S&P Global press release — SSAs on-chain via Chainlink (Oct 2025)](https://press.spglobal.com/2025-10-14-S-P-Global-Ratings-and-Chainlink-Collaboration-Brings-S-Ps-Stablecoin-Stability-Assessments-On-Chain)
4. [CoinDesk — S&P Global brings stablecoin risk scores on-chain through Chainlink (Oct 2025)](https://www.coindesk.com/business/2025/10/14/s-and-p-global-brings-stablecoin-risk-scores-onchain-through-chainlink)
5. [CryptoSlate — USDC tops S&P stablecoin stability chart while Tether faces scrutiny](https://cryptoslate.com/usdc-tops-sp-globals-stablecoin-stability-chart-while-tether-faces-scrutiny/)

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Neutral, sourced explainer from tempowiki. Index: https://tempo.dataos.so/llms.txt