Crypto Journalist

Amin Ayan

Crypto Journalist

Amin Ayan

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Amin Ayan is a crypto journalist with over four years of experience in the industry. He has contributed to leading publications such as Cryptonews, Investing.com, 99Bitcoins, and 24/7 Wall St. He has…

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August 11, 2025

S&P Global Ratings has issued a B- issuer credit rating to Sky Protocol, formerly known as Maker Protocol, in the first-ever rating by a major credit agency for a decentralized finance (DeFi) platform.

The rating forms part of S&P’s ongoing stablecoin issuer assessments, launched in 2023 to evaluate their ability to maintain a peg to fiat currencies.

The review covered the creditworthiness of Sky’s USDS and DAI stablecoins, along with its sUSDS and sDAI savings tokens.

S&P Rates USDS ‘Constrained’ With Score of 4 in First Evaluation

In its first evaluation, S&P gave USDS a “4” on its stability scale — labeled “constrained” — for maintaining its dollar peg.

Sky Protocol, a decentralized lending platform, facilitates crypto-backed loans and uses USDS to support lending and borrowing activity.

USDS ranks as the fourth-largest stablecoin by market cap, with $5.36 billion in circulation, according to CoinMarketCap.

S&P defines a default in this context as a “haircut imposed on token holders.”

The agency highlighted potential triggers, such as mass withdrawals exceeding available liquidity or credit losses outpacing capital reserves.

Weaknesses flagged include high depositor concentration, centralized governance, reliance on founder Rune Christensen, regulatory uncertainty, and limited capitalization, its risk-adjusted capital ratio was just 0.4% as of July 27.

Andrew O’Neil, S&P’s digital assets analytical lead, told Cointelegraph that a B- rating indicates the protocol “can meet its financial obligations” but remains “vulnerable in adverse business, financial and economic conditions.”

The governance issue was underscored by S&P’s observation that decision-making remains highly centralized, partly due to low voter participation, despite Christensen holding nearly 9% of governance tokens.

Sky’s Asset-Liability Committee said the review allowed it to re-examine traditional counterparty risk models and assess DeFi-specific risks such as smart contract vulnerabilities, oracle dependencies, bridge security, and governance issues.

These were identified as areas requiring ongoing monitoring and mitigation.

The rating also lowered Sky’s anchor score to “bb,” four notches below the U.S. banking anchor of “bbb+,” citing the broader regulatory uncertainty facing DeFi.

S&P Ranks USDC Strong, Puts USDT and USDS in ‘Constrained’ Category

S&P’s stablecoin assessment ranked Circle’s USDC at 2 (strong), Tether’s USDT at 4 (constrained), and USDS also at 4, with O’Neil noting that Tether’s main issue is transparency while USDS faces complexity in its asset base and weaker capital reserves.

S&P launched its stablecoin stability framework in December 2023, and in June, awarded its first blockchain-based mortgage securitization, by Figure Technology Solutions, an AAA rating for a $355 million pool of mortgage assets.

Globally, stablecoin regulation is accelerating. In the US, President Donald Trump signed the first federal stablecoin bill on July 18, calling it a “giant step” toward securing American dominance in global finance and crypto technology.

As reproted, Western Union is positioning itself for a new phase of digital transformation, signaling strong interest in using stablecoins to modernize its global remittance operations.

Moody’s has downgraded deposit ratings of top US lenders JPMorgan Chase, Bank of America and Wells Fargo just days after stripping the nation of its triple-A rating.

In a new report by Bloomberg, the lenders’ long-term deposit ratings were lowered to Aa2, a one-step decrease and Moody’s third-highest level.

The reason cited by Moody’s for the downgrade is the government’s weakened ability to support the banks.

On Friday, Moody’s downgraded America’s credit rating from AAA to AA1 while changing the country’s outlook from negative to stable. Moody’s attributes the downgrade to the United States’ soaring national debt and interest payment ratios that exceed those of other countries with the same credit rating.

“As deficits and debt have grown, and interest rates have risen, interest payments on government debt have increased markedly. Without adjustments to taxation and spending, we expect budget flexibility to remain limited, with mandatory spending, including interest expense, projected to rise to around 78% of total spending by 2035 from about 73% in 2024.”

Other bank rating downgrades included the senior unsecured debt ratings for some rated subsidiaries and branches of Bank of America. Moody’s also cut the long-term counterparty risk ratings for some units of Bank of America, JPMorgan and Wells Fargo, lowering them to Aa2 from Aa1.

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Moody’s credit rating agency downgraded the credit rating of the United States government from Aaa to Aa1, citing the rising national debt as the primary driver behind the reduction in creditworthiness.

According to the May 16 announcement from the rating agency, US lawmakers have failed to stem annual deficits or reduce spending over the years, leading to a growing national debt. The rating agency wrote:

“We do not believe that material multi-year reductions in mandatory spending and deficits will result from the current fiscal proposals under consideration. Over the next decade, we expect larger deficits as entitlement spending rises while government revenue remains broadly flat.”

The credit downgrade is only one degree out of the 21-notch rating scale used by the company to assess the credit health of an entity.

Despite the negative short to medium-term credit outlook, Moody’s maintained a positive outlook on the long-term health of the United States, citing its robust economy and the status of the US dollar as the global reserve currency as strengths, reflecting “balanced” lending risks.

Related: Asia’s wealthy shifting from US dollar to crypto, gold, China: UBS

Investors react to Moody’s US credit revision

Moody’s announcement drew mixed reactions from investors and market participants, leaving many unconvinced by the agency’s revised outlook.

Gabor Gurbacs, CEO and founder of crypto loyalty rewards company Pointsville, cited the rating agency’s previous credit assessments during times of financial stress as unreliable, signaling that the outlook was too optimistic.

“This is the same Moody’s that gave Aaa ratings to sub-prime mortgage-backed securities that led to the 2007-2008 financial crisis,” the executive wrote in a May 17 X post.

However, macroeconomic investor Jim Bianco argued that the recent Moody’s credit outlook does not reflect a real downgrade in the perception of US government creditworthiness and characterized the announcement as a “nothing burger.”

US government debt surpassed $36 trillion in January 2025 and shows no signs of slowing, despite recent efforts by Elon Musk and others to reduce federal spending and curtail the national debt.

As the debt climbs and investors lose faith in US government securities, bond yields will spike, causing the debt service payments to go up, further inflating the national debt.

This creates a vicious cycle as the government will have to entice investors with ever-greater yields to incentivize them to purchase government debt.

Magazine: Elon Musk’s plan to run government on blockchain faces uphill battle

Major tokens slumped Saturday as investors digested the implications of Moody’s Ratings downgrading the U.S. credit score, with ether (ETH), XRP, and dogecoin (DOGE) dropping roughly 3%.

The broader crypto market held at $3.3 trillion, paring earlier gains after briefly touching the week’s high.

The move came after rating giant Moody’s cut the U.S. sovereign credit rating to Aa1 from Aaa, citing the country’s swelling deficits, rising interest expenses, and a lack of political will to rein in spending.

The firm now joins Fitch and S&P in assigning a rating below the once-unblemished triple-A status long held by the world’s largest economy.

As such, the White House was quick to respond, with spokespersons for President Donald Trump criticizing the decision as politically motivated.

The downgrade had an immediate effect on traditional markets: U.S. Treasury yields jumped, with the 10-year note rising to 4.49%, while S&P 500 futures dipped 0.6% in after-hours trading.

Historically, concerns about U.S. debt sustainability and dollar debasement have served as tailwinds for bitcoin and other decentralized assets. However, credit downgrades can also trigger short-term risk-off behavior, particularly if macro uncertainty leads institutional traders to reduce exposure.

Meanwhile, some traders warned of a deeper sell-off in the near term on general profit-taking before the next rally.
“Bitcoin is holding the $104,000 mark as a key level and the positive factor is that sellers have not yet managed to seize control of the market,” Alex Kuptsikevich, the FxPro chief market analyst, told CoinDesk in an email. “However, resilience at high levels may be temporary before the next bounce, and there is considerable pressure near the upper boundary of the current range.”
“In other words, the short-term outlook suggests a decline from current levels,” Kuptsikevich opined.

The artificial intelligence chip king, Nvidia (NVDA 2.33%), has been on a long, dominant run for several years now. The company is seen as the best picks-and-shovels play in what could be a game-changing sector that impacts nearly all aspects of our daily lives. However, a tough run this year and recent export restrictions targeting China have now sprouted the first sell rating from a Wall Street analyst.

Seaport Global Securities analyst Jay Goldberg recently downgraded Nvidia to a sell rating and issued a $100 price target, the lowest on Wall Street. Nvidia and the rest of the AI sector, as well as the entire stock market, certainly face a tough near-term macroeconomic outlook. Should investors be worried?

Nvidia is still a leader

Goldberg, in his research note, suggested that the upside from AI is “priced in for now.” Goldberg is also bearish due to his belief that the company’s biggest customers “are all looking to design their own chips,” and “it’s likely that AI budgets slow in ’26.”

The desire to have custom AI chips could be a trend, but it’s more likely that AI broadens its reach to a much bigger customer base that may be looking for third-party solutions to keep up with competition instead of outright being a leader. Nvidia still makes the most advanced chips, and it doesn’t look to be at any risk of losing this market-leading position. Even in China, where Huawei reportedly began testing a chip to rival Nvidia, it’s only going to rival the company’s H100 Hopper chip, which isn’t even the company’s most recent design.

Image source: Nvidia.

The rest of 2025 could be tough sledding for Nvidia, but the company’s valuation of 26 forward times earnings estimates is quite reasonable. Its dominant position, both in market share and innovation, should help it overcome near-term hurdles, making the stock a long-term buy for any investor who believes in the AI opportunity overall.