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.
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’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.
