Moody's launches AI tool to predict stablecoin depegging

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Moody's launches AI tool to predict stablecoin depegging

In the latest development in the crypto market, Moody's (NYSE: MCO ) Analytics has launched the Digital Asset Monitor (DAM) and DeFi Communities on Monday. DAM, an artificial intelligence tool developed within a year using agile frameworks, is designed to predict stablecoin depegging by assessing DeFi risk and volatility from multiple data sources.

The newly launched AI tool scrutinizes 25 fiat-backed stablecoins, including PayPal (NASDAQ: PYPL ) Coin (PYUSD), Tether , and USD Coin . It provides an indication of a stablecoin's chance of depegging from its fiat within 24 hours. The tool also details a stablecoin issuer's stability, lists asset-holding custodians, and assesses reserve quality.

Moody's highlighted the importance of DAM in the context of the growing stablecoin market, which now accounts for about 10% of the crypto market. The need for such a tool is further underscored by the fact that large-cap fiat-backed stablecoins have depegged 609 times this year alone. Depegging is defined as a greater than 3% movement against the fiat currency peg.

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