Credit rating agency Moody’s investor service has reported that without support from US lawmakers on both sides of the political aisle for digital asset-focused legislation, investors and companies alike may turn to other pro-digital jurisdictions. cryptocurrencies.
In a June 20 report, Moody’s noted key differences in how Democrats and Republicans have handled cryptocurrency-focused legislation in the United States, specifically competing language in a stablecoin bill and a bill intended to provide a comprehensive framework. for digital assets. Many of the questions among legislators concern whether stablecoin regulation is overseen at the federal or state level, and addressing consumer protection in the wake of the bankruptcy of many crypto companies in 2022.
“Despite agreeing on the need to protect consumers and have a harmonized framework for digital assets, Democrats and Republicans hold different views on how to achieve these goals,” the report said. “If a bipartisan agreement is not reached and progress is not made on specific legislation for digital assets, the United States […] could prove comparatively less attractive to both companies and investors, especially in a context where many other jurisdictions are moving forward with comprehensive rules.”
Moody’s noted the opposing views of Republicans on digital assets, often represented by the Chairman of the House Financial Services Committee, Patrick McHenry, and the Democrats, represented by the highest-ranking member, Maxine Waters. The two raised their respective concerns at a June 13 hearing on the future of digital assets, though Moody’s said the meeting “revealed even stronger political disagreements” over developing a framework for cryptocurrencies.
“Some Democrats have expressed fear that the proposed bill could have adverse implications for consumer protection and fraud prevention. […] The path to a bipartisan agreement seems very uncertain, and much more debate in Congress can be expected.”
Many cryptocurrency companies have already lashed out at US lawmakers over a lack of regulatory clarity, suggesting that moving away from the country might be in their best interest. Executives from Coinbase, which is currently based in the United States and is facing a lawsuit from the Securities and Exchange Commission, traveled to the United Arab Emirates in May to explore using the region as a potential “strategic hub.”
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