How Are Ratings Agencies Adapting to the Rise of Digital Assets
The expansion of digital assets is prompting credit rating companies to explore new rating methods and engage with new regulatory frameworks.
However, there will be little immediate impact on traditional credit scores.
In an effort to bring more clarity and consistency to this ever-changing sector, regulatory bodies are drawing up new rules.
These bodies include SEBI in India and MiCAR in the European Union.
Digital Assets Impact
While it's true that cryptocurrency ownership doesn't directly affect a traditional credit score, the associated financial behaviors do.
Engaging in the volatile crypto markets using borrowed funds, such as credit cards or personal loans, can increase debt and credit utilization, which, if not managed carefully, can have a negative influence on a credit score.
New risks, such as operational difficulties, possible fraud, and cybersecurity vulnerabilities, arise when traditional financial institutions engage in digital assets.
The potential impact of these risks and the associated regulatory uncertainty on a bank's creditworthiness and stability is evaluated by rating agencies like Fitch, Moody's, and S&P Global.
When assessing the creditworthiness of individuals and small businesses, especially those without a formal credit history, traditional lenders and credit information firms are turning to "digital footprints" like online transaction history, e-commerce ratings, and utility bill payments.
This shift is driven by the rise of digital finance.
Since digital assets, decentralized finance (DeFi) and stablecoins lack the standardized structures and historical data of conventional debt instruments, credit rating agencies are developing novel analytical frameworks to evaluate the unique risks associated with these assets.
CRAs & Regulation
To ensure the protection of investors and maintain financial stability, regulatory bodies are working to establish clear guidelines for the digital asset market.
Rating agencies are facing heightened scrutiny from regulators seeking greater transparency regarding their rating methodologies for digital asset-related products, their management of conflicts of interest, and the performance data they provide.
With complete implementation happening in stages during 2024 and 2026, the European Union's Markets in Crypto-Assets Regulation (MiCAR) creates a comprehensive legal framework for the issuance and service provision that pertains to crypto-assets.
In India, once the necessary regulations are in place, digital asset-related securities will have to comply with SEBI's stringent disclosure requirements for debt instrument issuers.
Due to their distributed nature and widespread use around the world, digital assets are subject to a patchwork of rules that makes it difficult to enforce consistency and increases the possibility of regulatory arbitrage.
The fast-evolving world of digital asset solutions and products presents authorities with new obstacles, which they are determined to overcome.
Ratings agencies serve as essential impartial assessors in conventional markets and are anticipated to fulfil a comparable role for digital assets as regulatory clarity advances and the market evolves.
What Fitch Says
In a research paper published on December 8, Fitch Ratings said banks in the US face new possibilities and threats from digital asset regulation.
According to the agency, US banks' increasing use of digital assets improves their product offerings, which in turn might boost fees, returns, operational efficiency, and customer service.
Fitch said even in relatively low-risk areas like cash management and trust and custody services, it increases risks associated with reputation, liquidity, operations, and compliance.
In recent years, the United States' regulatory environment has changed dramatically to welcome digital assets.
After much deliberation under Biden's administration, US banks can now offer blockchain-based services, cryptocurrency custody, and stablecoin issuance without first obtaining approval.
Some of the most prestigious banks in the world have recently announced digital asset-related projects, including JP Morgan Chase, Bank of America, Citigroup, and Wells Fargo.
A number of cryptocurrency-related businesses are applying for charters as federal trust banks.
Essential Insights From Moody's
Shifting from Fitch, Moody's also emphasizes the influence of new technologies such as AI and crypto in their recent credit review.
Leading beneficiaries: Technology providers, industries reliant on data such as finance and healthcare, as well as labor-intensive fields like logistics, all of which stand to gain significantly from the integration of AI.
Limited potential for growth: Industries characterized by extended investment timelines, such as manufacturing and pharmaceuticals, are likely to experience minimal disruption or opportunities for advancement.
Regional disparities: Variations in innovation, energy expenses, regulatory environments, and talent availability will create inconsistent credit risks throughout international markets.
Chainlink Collaboration & S&P Ratings Offerings
Continuing with other major agencies, S&P Global Ratings provides thorough index services for cryptocurrencies, as well as evaluations and insights for tokenized assets and stablecoins.
To succeed in this new market, they rely on their tried-and-true analytical frameworks and credit ratings.
An evaluation system for the stability of popular stablecoins, such as USDT and USDC, has been created by S&P Global Ratings. Factors like asset quality, governance, regulatory compliance, liquidity, and past performance are considered in these assessments. Thanks to a collaboration with Chainlink, the SSAs can also be accessed onchain.
Various tokenized treasury funds and digital bonds issued on various blockchains have been assessed and rated by the firm.
It appears that there is a trend towards using standard financial grading methods for financial services that are built on the blockchain. Sky system, a decentralized finance (DeFi) system, was the first to receive a credit rating from S&P Global Ratings in August 2025.
Not content to limit themselves to stablecoins and tokenized traditional assets, they have shown their engagement with native cryptocurrency groups.
The research and articles from S&P Global delve into various subjects such as the effects of regulation, operational risks in decentralized finance, advancements in digital bonds, and the overall development of the market.
A broad range of cryptocurrency indexes is provided by S&P DJI, a unique sector of S&P Global.
Using metrics like market cap and liquidity, these indices track the progress of various digital assets, not including privacy tokens and stablecoins.
The S&P Digital Market index set includes a general market index as well as Bitcoin and Ethereum indexes. Tokens and protocols built on the DeFi protocol can be evaluated using the S&P Cryptocurrency DeFi Index.
An innovative combination of cryptocurrency and crypto-related stocks will make its debut in the S&P Digital Markets 50 Index in late 2025.
The aim of S&P Global's approach is to enhance the decision-making processes of institutions within regulatory frameworks by introducing financial standards and clarity to the digital asset market.
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