Moody's assigns B3 rating to Sky Protocol in first stablecoin protocol assessment

On October 7, 2026, Moody's Ratings assigned Sky Protocol a B3 issuer rating with a stable outlook, marking the first-ever rating for a stablecoin protocol. The non-investment-grade mark mirrors S&P Global's B- rating from August 2025, which flagged centralized governance and weak capital buffers. Despite these concerns, institutional interest is growing, with Galaxy Digital adding $100 million of sUSDS to its treasury in late September 2026, and Standard Chartered projecting fivefold returns by 2028.

Credit ratings assigned to Sky Protocol

• ▪Sky Protocol is the only stablecoin protocol formally rated by both Moody's Ratings and S&P Global, following a B- rating assigned by S&P Global in August 2025
• ▪On October 7, 2026, Moody's Ratings assigned Sky Protocol a B3 issuer rating with a stable outlook, marking the first rating the agency has issued to a stablecoin protocol

S&P global's assessment of protocol weaknesses

• ▪In August 2025, S&P Global noted that Sky Protocol founder Rune Christensen held up to 9% of the protocol's governance tokens, giving him significant influence amid low voter turnout
• ▪In August 2025, S&P Global predicted that a rating upgrade for Sky Protocol was not realistic within the subsequent 12 months due to its thin capital and surplus buffers
• ▪In August 2025, S&P Global flagged Sky Protocol's high depositor concentration, highly centralized governance, 0.4% risk-adjusted capital ratio, and thin surplus buffer as key weaknesses

Galaxy Digital's adoption of Sky Protocol assets

• ▪In late September 2026, Galaxy Digital purchased an undisclosed amount of the SKY governance token, which Greg Feibus of Sky Frontier Foundation linked to S&P Global's B- rating from August 2025
• ▪In late September 2026, Galaxy Digital added $100 million of sUSDS to its corporate treasury and approved sUSDS as collateral across its institutional lending and trading business

Future outlook

• ▪Standard Chartered predicted that Sky Protocol's USDS business, staking rewards, and buybacks could increase income to token holders fivefold by 2028
• ▪S&P Global plans to raise Sky Protocol's rating if it sees improvements in governance concentration, thin capital, and depositor concentration

Debatable claims

• ▪Sky Protocol's low credit rating is a significant barrier to institutional adoption
• ▪Traditional credit ratings are an effective way to evaluate decentralized protocols
• ▪Centralized governance poses an unacceptable risk to Sky Protocol