U.S. credit rating agency Fitch warns banks with large crypto exposure…"Ratings may be reassessed"

International credit rater Fitch Ratings said it could negatively reassess the credit ratings of U.S. banks with large exposure to virtual assets (cryptocurrencies).

On the 9th (Korean time), according to crypto-focused media Cointelegraph, Fitch said in a report published that "digital asset technologies such as the issuance of stablecoins (virtual assets pegged to fiat currency), deposit tokenization, and blockchain-based payments provide banks with opportunities to increase fees, revenue, and efficiency, but at the same time carry reputational, liquidity, operational, and compliance risks." Fitch added that "it could negatively reassess U.S. banks with large exposures to digital assets."

Fitch also said, "It is true that improvements in the U.S. regulatory environment have increased a degree of safety," but emphasized that "banks must be able to sufficiently address the high volatility of virtual assets, owner anonymity, and issues of asset loss and theft prevention." It explained that only if these requirements are met can the profitability and benefits offered by digital assets be realized.

It also expressed concerns about stablecoins. The report said, "Major large banks such as JPMorgan, Bank of America (BofA), Citi, and Wells Fargo are already involved in the crypto sector," and analyzed that "if stablecoin adoption expands, it could grow large enough to affect the U.S. Treasury market. In that case, the risk to the financial system could increase."

Fitch, along with Moody's and S&P Global, is one of the world's most influential credit rating agencies. The ratings from these institutions have a major impact on global financial markets. In particular, if a downgrade occurs, it can have a negative effect on funding and investor confidence.