Moody’s Analytics is introducing a new stablecoin service called Digital Asset Monitor that will use AI to predict stablecoin depeggings “in a 24-hour time horizon.” The service will also provide real-time insights into stablecoin issuers’ liquidity and stability.

Major cryptocurrency trading platform Kraken is exploring various leading blockchain technology firms to help it launch its own layer-2 network, following in the footsteps of Coinbase, which recently rolled out its own Base network.

The third largest bank in Germany by asset size, DZ Bank, has rolled out a new cryptocurrency custody platform built on the blockchain. The platform will serve institutional clients with crypto securities.

Top stories in the Crypto Roundup today:

• Moody’s Launches AI Service to Predict Stablecoin Depeggings
• Kraken Eyes Strategic Partnerships for Layer-2 Blockchain Initiative
• DZ Bank Launches Crypto Custody Platform for Institutional Clients
• Crypto Exchanges Adopt Custody Services to Enhance Security

Moody’s Launches AI Service to Predict Stablecoin Depeggings

Moody’s Analytics is introducing a new stablecoin service called Digital Asset Monitor that will use AI to predict stablecoin depeggings “in a 24-hour time horizon”. The service will also provide real-time insights into stablecoin issuers’ liquidity and stability.

The stablecoin market is becoming more stable, Moody’s said in a November 6 announcement for the launch of Digital Asset Monitor. The firm said that so far this year there have been 1,914 depeggings, of which 609 were fiat-backed large-cap stablecoins.

The figure contrasts the2,847 depeggings that were experienced in 2022, of which 707 were for large-cap stablecoins. Moody’s noted that while it found some correlation to rising interest rates, several coin-specific causes were also found.

The new service will track 25 fiat currency-backed stablecoins that represent over 92% of the total stablecoin sector, including Tether’s USDT, Circle’s USDC, and PayPal’s PYUSD.

Moody’s Digital Asset Monitor service will also show “the stablecoin’s market and liquidity dynamics, the stability of the stablecoin issuer, the custodians that hold the stablecoin’s assets, and the quality of these reserves” while also providing “a transparency index that will highlight the quality of disclosures made by the entities behind these fiat-backed stablecoins.”

Kraken Eyes Strategic Partnerships for Layer-2 Blockchain Initiative

Major cryptocurrency trading platform Kraken is exploring various leading blockchain technology firms to help it launch its own layer-2 network, following in the footsteps of Coinbase, which recently rolled out its own Base network.

Kraken is reportedly looking into Polygon, Matter Labs, and Nil Foundation, among others, as potential partners to create its own layer-2 network, and according to anonymous sources, there may also be other teams in the discussion.

Rival cryptocurrency exchange Coinbase launched its layer-2 network in August using the OP Stack, a technology from the OP Labs team that created Optimism, the second-largest layer-2 network on top of Ethereum.

Polygon is a prominent developer of Ethereum scaling solutions, which include Polygon’s Proof-of-Stake network and Polygon zkEVM, and earlier this year released a new software toolkit for developers to create their own blockchains.

DZ Bank Launches Crypto Custody Platform for Institutional Clients

The third largest bank in Germany by asset size, DZ Bank, has rolled out a new cryptocurrency custody platform built on the blockchain. The platform will serve institutional clients with crypto securities.

DZ’s head of securities services and digital custody, Holger Meffert, shared the bank’s enthusiasm for distributed ledger technology (DLT), saying they assume that “within the next ten years, a significant proportion of capital market business will be processed via distributed ledger technology-based infrastructures.”

The bank plans to let institutional investors and private customers purchase cryptocurrencies, “such as Bitcoin,” in the future. For this purpose, DZ has applied for a crypto custody license with the German Federal Financial Supervisory Authority (BaFin) in June 2023.

Other traditional banks, including Commerzbank and DekaBank, also applied for crypto custody licenses from Germany’s financial regulator, BaFin.

Crypto Exchanges Adopt Custody Services to Enhance Security

The average Know Your Customer (KYC) score for October 2023, according to Ciphertrace, was 3.2/4, was 3.2 out of 4, showing an improvement from the scores of 2.8 out of 4 and 2.4 out of 4 recorded in April 2023 and October 2022, respectively.

Notably, prominent exchanges have been proactive in enhancing their verification processes. A rising trend in the adoption of custody services is also signaling an increase in exchange security standards, with the number of trading platforms relying on custodians rising from 32% in April 2023 to 44% in October 2023.

Find out more via CCData’s latest Exchange Benchmark, the industry standard for ranking the risk associated with the digital asset exchange sector.

State of the Crypto by Top Tier Exchange Volume

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