S&P Global gives Sky Protocol 'B-' credit rating, citing centralization and liquidity risks
Quick Take S&P Global gave USDS issuer Sky Protocol a “B-” credit rating, based on risks involved with high depositor concentration, centralized governance and others. The ratings agency said an upgrade in ratings is “highly unlikely” for Sky in the next 12 months.
S&P Global has given USDS issuer Sky Protocol a "B-" credit rating. This marks the first time the ratings agency has issued a credit rating for a stablecoin system, according to Sky.
According to S&P's official website, a B rating refers to being more vulnerable to adverse business, financial and economic conditions but currently has the capacity to meet financial obligations.
"The outlook is stable," the report said, nonetheless stating that its ratings on Sky are "constrained by its high concentration of depositors, highly centralized governance, and weak risk-adjusted capitalization."
S&P pointed out that while founder Rune Christensen controls 9% of governance tokens, the protocol sees a low voter turnout that means Christensen has significant power in deciding Sky's future path.
The ratings report also said a small number of large depositors increases the risk of a liquidity run. Its risk-adjusted capital ratio of 0.4% and non-dynamic surplus reserve buffer is a "noteworthy weakness," S&P noted.
Other risks involve exposure to "low-probability, high-severity" cyber risks from using smart contracts to store assets and ongoing uncertainty on future regulatory treatment of decentralized finance.
These risks are only partially offset by Sky's solid track record of minimal credit losses during previous market downturns and modest earnings since 2020. The credit rating also took into account how Sky mitigates cyber risks with robust smart contract audits and bug bounty programs.
Founded in 2017 originally as Maker, Sky issues USDS, currently the fourth largest stablecoin in the world with a market capitalization of $7.9 billion, according to The Block's crypto price page .
S&P stated that in the next 12 months, it could lower its ratings on Sky if it expects the protocol to have insufficient liquidity to support sudden withdrawals or losses on crypto-backed loans exceeding its surplus reserve. It said it could also lower ratings in case of adverse regulatory developments.
"An upgrade is highly unlikely in the next 12 months," S&P noted. Still, it said it could raise Sky's ratings over a longer period if it manages to mitigate risks from centralized governance, risk-adjusted capital ratio and excessive depositor concentration.
The Block has reached out to Sky for comments on the credit rating.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
How much CPO demand will Nvidia Rubin Ultra generate? Bernstein: Optical value per Pod will increase fivefold
Bernstein believes that the co-packaged optics (CPO) and fiber demand driven by Nvidia's Rubin Ultra architecture will surge significantly, with the optical content per Pod rising from $1 million to $5.4 million. This will propel the size of Nvidia's optical ecosystem market to $46.8 billion by 2028 (a 91% annual increase). Although the industry faces supply bottlenecks with InP substrates, the outlook remains positive. The institution reiterates its “outperform” rating for Lumentum, Coherent, and Ciena.
UBS Q3 implements a two-way strategy with gold options, heavily invests in technology stocks, and builds positions in SK Hynix (SKHY.US)
UBS Group (UBS.US) has submitted its Q3 holdings report (13F) as of September 30, 2026.
SpaceX (SPCX.US) reportedly attempts “de-Nvidiaization” at the rack level: developing Kessel cabinets to bypass L6 compute boards, purchasing only chips
SemiAnalysis: SpaceX has developed its own Kessel cabinet, bypassing Nvidia's L6 cards to provide more options for manufacturing its own hardware.
$3.7 billion “data center power equipment prepayments” abandoned! What did "the most active buyer of gas turbines", SoftBank, see?
In the second quarter of fiscal year 2026, SoftBank reported a net loss of $7.1 billion, primarily due to a $3.7 billion impairment charge from a $9.5 billion advance payment for power generation equipment for US data centers—of which about $2.9 billion was non-refundable and effectively lost. The CFO admitted that SoftBank placed orders before the project plan was finalized, and is now conducting a comprehensive review of its procurement strategy. "The most aggressive purchaser of gas turbines has now written off the deposit in this way."
Crypto prices
More
