Moody’s is a well-known company in the crypto ecosystem. With its main activity being research to improve operations within markets, it returns this time, not to sound the alarm, but to present its new AI service which should predict events targeting stablecoins within a of 24 hours.
Moody’s AI serving stablecoins and decentralized finance
Decentralized finance is becoming more and more active in everyday life. Moreover, we are recording high activity on stablecoins while bitcoin, the main crypto, is far from its ATH. However, regulatory problems continue to arise and with them, risks.
With this in mind, Moody’s Analytics, the financial services subsidiary of Moody’s, unveils its new service: an AI that predicts the depegging of stable coins. Called Digital Asset Monitor, this service will not only predict depegging events within 24 hours.
According to declarations from Moody’s on Monday, it will also provide real-time data on the liquidity of a stablecoin issuer. But also, on the quality of the reserves and the depositories holding these assets. Based on the analysis that a stable coin goes extinct if its price fluctuates more than 3% in a day relative to the value of the underlying asset, the company believes its AI will be of the greatest importance.
Growth brings risks. Be careful!
Despite Binance’s prediction about the potential demise of stablecoins, the sector continues to grow. Indeed, more and more crypto, or just financial, companies are looking for a way to issue their own token. Among others, Cardano and PayPal.
On the other hand, AI is gaining momentum and Tether has understood this by mixing the technology with bitcoin mining. Moody’s also sees the potential, since its new service aims to use artificial intelligence to limit risks in DeFi.
According to the company, there have been no less than 609 cases of espionage in 2023. And these mainly concern stablecoins with the largest market capitalizations. Thus, Digital Asset Monitor will support 25 large tokens.
Including the most popular ones such as PYUSD, USDT and USDC. Note that the latter represent approximately 92% of the overall stablecoin market. And given the growing activity and the lack of regulation, things could quickly get out of hand.
The crypto ecosystem involves new risks and stablecoins are no exception. Indeed, Moody’s data demonstrates that the sector remains vulnerable. As a result, this service could well be the key to better, secure experiences.
Receive a summary of the news in the world of cryptocurrencies by subscribing to our new service daily and weekly so you don’t miss anything of the Tremplin.io essentials!
