S&P upgrades Compound Treasury’s credit rating
With its B- rating from S&P, Compound Treasury is one of the first offers in decentralised finance to obtain this grade from a major rating agency.
Investors may get a sense of how likely it is that companies or governments that issue debt will be able to satisfy their financial commitments on time by looking at credit ratings. It is possible to get a rating from D to triple-A on this scale.
As part of “ongoing conversations” with S&P, Compound Treasury stated the rating might be raised in the near future.
“More exposed to unfavourable corporate, financial, and economic situations, but has the potential to satisfy financial obligations,” according to S&P Global’s website. Angola, Belize, and El Salvador are just a few of the countries having B- credit ratings.
Users should anticipate “minimal loan losses on the Compound Treasury platform” because of the grade. For Robert Leshner, the grade is a “watershed moment for our business, and shows that DeFi is an equal peer to conventional financial markets, and ready for institutional capital,” he told The Block.
Because Cumulative Treasury is a daily liquidity product, Leshner noted, “It’s not apples to apples because in unstable countries you’re incurring high duration risk.”
To attract institutional and ordinary investors alike, the crypto market has offered juicy dividends. However, US financial authorities have taken notice of retail products like Coinbase’s Lend programme and BlockFi’s interest accounts.