In its report published on Tuesday, Fitch Ratings stated that with the finalization of remedial regulations regarding stablecoins, the risks will decrease, thus encouraging financial institutions to invest.
Fitch, one of the three largest rating agencies in the world, underlined that the European Union is the first big name to publish draft regulations for the sector, and that it also calls for regulation by issuers such as banks and electronic money institutions.
A major regulatory report published in the US also suggested that stablecoin issuers should be treated as insured banks.
Fitch believes that regulations to be made in the USA will form the cornerstones of the industry in the medium term, as the majority of stablecoins traded are based on US dollars.
Fitch; “The basic elements of the regulations to be made about stablecoins; Transparency on issues such as users’ legal rights and reserve assets will be the most important factor in evaluating the credit scores of issuers.” said.