Moody’s, the credit ratings agency, has issued a report warning that the lack of bipartisan support for crypto regulation in the United States could make the country less attractive to investors and companies.
The report, released on June 20, highlighted the political divide among lawmakers regarding legislation focused on digital assets, specifically in relation to stablecoins and the establishment of a comprehensive regulatory framework.
Moody’s identified significant disparities between the approaches of Democrats and Republicans when it comes to crypto-focused legislation.
One key area of contention is the regulation of stablecoins, with lawmakers differing on whether oversight should be conducted at the federal or state level. Another concern is the need to address consumer protection issues, especially in light of several crypto companies going bankrupt in 2022.
The report stated, “Despite agreement on the need for consumer protections and a harmonized framework for digital assets, Democrats and Republicans hold different views on how to achieve these objectives.”
Moody’s warned that the failure to reach a bipartisan agreement and advance legislation specifically addressing digital assets could diminish the attractiveness of the United States compared to other jurisdictions that are actively implementing comprehensive rules.
Moody’s specifically highlighted the contrasting views between Patrick McHenry, Chair of the House Financial Services Committee and representative of the Republican party, and Maxine Waters, ranking member and representative of the Democratic party.
Both expressed their concerns during a hearing on the future of digital assets held on June 13. However, Moody’s noted that the gathering only served to highlight the deepening political disagreements surrounding the establishment of a crypto framework.
The uncertain path toward bipartisan agreement and the anticipation of extensive debates in Congress have raised concerns among many crypto firms.
Numerous companies have criticized U.S. lawmakers for the lack of regulatory clarity and have indicated that relocating outside the country might be in their best interest.
For instance, executives from Coinbase, currently based in the U.S. and facing legal action from the Securities and Exchange Commission, visited the United Arab Emirates in May to explore the region as a potential strategic hub.
In conclusion, Moody’s report underscores the need for bipartisan support and cooperation among lawmakers in order to create a favorable regulatory environment for digital assets in the United States.
Without such support, the country risks losing its appeal to investors and companies, who may seek more crypto-friendly jurisdictions elsewhere.
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