Credit rating agencies adapt to the disruptive rise of digital assets amid increasing regulation

The expansion of digital assets is prompting established credit rating companies to test new methodologies and engage with emerging regulation, even as traditional credit scores for consumers remain largely unaffected in the near term.

According to the original report, rating agencies are developing novel analytical frameworks to account for the idiosyncratic risks of crypto, decentralised finance (DeFi) and stablecoins , instruments that lack the standardised structures and long histories of conventional debt. Industry data shows regulators from jurisdictions including the European Union and India are moving to impose clearer rules: the EU’s Markets in Crypto‑Assets Regulation (MiCAR) is being phased in through 2024–26, while India’s markets regulator, SEBI, is preparing disclosure requirements that would apply to digital‑asset‑linked securities once regulations are in place.

Regulatory scrutiny is altering the role of credit rating agencies (CRAs). Agencies are being pressed for greater transparency about their methodologies for digital‑asset products, their management of conflicts of interest and the performance data they publish. The U.S. Securities and Exchange Commission’s previous enforcement actions against rating firms for recordkeeping failures , which resulted in more than $49m in civil penalties for six agencies for not preserving electronic communications , underscore the regulatory risks facing the sector and the emphasis on compliance.


How digital assets translate into credit risk varies. Personal cryptocurrency ownership does not directly change a conventional credit score, but behaviours associated with crypto can: borrowing on credit cards or through personal loans to fund volatile positions raises debt levels and credit utilisation, which can hurt scores if not managed. For banks and larger institutions, the adoption of digital‑asset services introduces operational, liquidity, reputational and cyber risks that rating agencies must incorporate into issuer assessments.

Major agencies are responding in different but complementary ways. Fitch, in a December research paper, noted U.S. banks’ expanding use of digital assets offers revenue and efficiency opportunities but also amplifies reputational, liquidity, operational and compliance risks. Fitch said such services , even in relatively low‑risk areas like cash management and custody , require fresh supervision of risk exposures.

Moody’s has broadened its reviews to capture the twin effects of new technologies. Its work highlights winners such as technology providers and data‑intensive sectors, while flagging that long‑horizon industries such as heavy manufacturing and pharmaceuticals have limited upside from near‑term disruption. Moody’s also emphasises how regional disparities in regulation, energy costs and talent shape heterogeneous credit risks across markets.

S&P Global Ratings has moved to apply traditional credit standards to tokenised instruments. The company has built rating and index offerings for cryptocurrencies, tokenised treasury funds and digital bonds, and has published an assessment framework for stablecoins that considers factors including asset quality, governance, regulatory compliance, liquidity and past performance. S&P’s work has extended onchain: the firm says some of its stablecoin assessments can be accessed onchain via a collaboration with Chainlink. S&P DJI provides a suite of crypto indices , from broad market to Bitcoin and Ethereum benchmarks , and plans to launch a combined crypto and crypto‑related equities index in late 2025.

Market developments are stressing the need for that analytical depth. S&P downgraded Tether’s USDT to “5 (weak)” from “4 (constrained)” in late November, citing rising exposure in Tether’s reserves to higher‑risk assets and persistent transparency concerns about custodians and counterparties. Tether maintains it has adequate reserves to meet redemptions; S&P’s action illustrates how reserve composition and disclosure practices now feed directly into credit assessments for widely used stablecoins.

Institutional market moves illustrate both adoption and the collateral questions CRAs must judge. J.P. Morgan’s recent issuance of a $50m commercial paper on the Solana blockchain for Galaxy Digital Holdings, settled in USDC, underlines how banks are experimenting with blockchain settlement and tokenised funding. The bank has said it plans to scale such offerings to a broader set of issuers and securities. Rating agencies will need to assess how tokenised issuance changes liquidity, settlement risk and counterparty exposures in ways that matter for credit quality.

At the same time, central banks and supervisors are adjusting their operational frameworks. The European Central Bank has signalled tighter collateral rules, moving in some cases from using the highest available credit rating on an asset to using the second‑best, a shift that amplifies the influence of ratings on what securities are eligible in central‑bank operations.

Practical challenges remain. Digital assets’ distributed, cross‑border nature has produced a patchwork of rules that complicates consistent supervision and risks regulatory arbitrage. Data gaps , shorter histories, non‑standardised disclosures and fragmented onchain/offchain information , make comparisons and model calibration harder. For retail and small‑business credit assessment, non‑traditional “digital footprints” such as e‑commerce histories and utility payments are being used to broaden credit access, but those alternative data sources require fresh scrutiny for privacy, bias and reliability.

As regulatory clarity advances, CRAs are expected to occupy a role similar to the one they hold in conventional markets: independent assessors translating complex exposures into actionable risk signals. Yet recent enforcement and market episodes are a cautionary note: agencies must bolster documentation and transparency, and adapt methodologies, even where the core tools of credit analysis remain relevant. The interplay between evolving regulation, new product designs and established credit frameworks will determine whether ratings can deliver the comparability and confidence that institutional and retail participants increasingly demand.