Moody’s Report on US Crypto Regulation
Moody’s credit ratings agency’s investors’ service has reported that if US lawmakers from both sides of the political spectrum do not back legislation concerning digital assets, investors and companies may look to other crypto-friendly countries.
In a June 20 report, Moody’s highlighted the distinct approaches taken by Democrats and Republicans when it comes to crypto-related legislation in the United States, particularly the varying language in a bill on stablecoins and another bill intended to create a comprehensive system for digital assets. Much of the disagreement between lawmakers revolves around whether regulation of stablecoins should be regulated by the federal government or the states, and how to protect consumers in light of the numerous crypto companies that went bankrupt in 2022.
Despite the consensus that consumer protections and a unified system for digital assets are necessary, Democrats and Republicans have disparate ideas on how to accomplish these goals, the report stated. Without bipartisan consensus and legislation specifically targeting digital assets, the US could become less appealing to businesses and investors, especially when other countries are already implementing comprehensive regulations.
Coinbase and SEC Charges
Moody’s has lowered its rating of Coinbase due to the “uncertainty of the severity” of the SEC charges.
Moody’s noted the divergence of opinion between Republicans, typically represented by House Financial Services Committee Chair Patrick McHenry, and Democrats, typically represented by ranking member Maxine Waters, on digital assets. Both of them voiced their respective apprehensions during a June 13 hearing on the future of digital assets, though Moody’s said the meeting “showed even greater political disagreements” regarding the construction of a crypto framework.
Crypto companies have strongly criticized U.S. legislators for not providing clear regulations, implying that it might be beneficial to relocate elsewhere. Executives from Coinbase, which is based in the U.S. and is being sued by the SEC, went to the UAE in May to consider it as a possible “strategic hub”.
Magazine Opinion: The GOP’s crypto maximalists are almost as bad as the Democrats’ “anti-crypto army”.
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