Moody’s: Regulatory uncertainty will weigh on the United States

Without a bipartisan approach to cryptocurrency regulation, the United States will become less attractive to both firms and investors. The Block, citing Moody’s report, says so.

Analysts said that despite a shared commitment to consumer protection, Republicans and Democrats have divergent views on rules for the digital assets market.

The comprehensive market-structure bill proposed by House Speaker Patrick McHenry would change the legal status of cryptocurrencies from securities to commodities.

Congresswoman Maxine Waters said that during hearings on the proposal she was concerned about consumer protections.

“The bill apparently halts any enforcement actions SEC against crypto firms, even if they have engaged in fraud. This temporary registration could reward offenders with a “get-out-of-jail” card and allow them to continue to harm consumers and investors,” she added.

Officials also discussed a new version stablecoins regulation bill. Moody’s analysts warned that the proposed rules could lead to heightened regulatory arbitrage and harm consumers.

“Distinguishing between banking and nonbanking stablecoin issuers, and allowing for oversight of each category by a separate regulator, could lead to regulatory fragmentation and create an asymmetry of risks between the issuers,” Moody’s said.

In June, U.S. Treasury Secretary Janet Yellen urged Congress to move swiftly to pass crypto legislation.