Fitch Agency: Cryptocurrencies are promising, but still far from mass distribution

in fitch •  4 years ago 

The American corporation Fitch Ratings, which is one of the" big three " international rating agencies, in its new report drew attention to the trend towards the spread of cryptocurrencies among large payment companies. According to analysts, their actions will not have a visible impact on credit ratings in the short term, but over time may lead to changes in the financial system.

The authors of the report mention news affecting PayPal, Square, Visa, Mastercard and Moneygram, all of which have included or plan to include cryptocurrencies in their product line in one form or another. According to Fitch, thanks to this, the opportunities for using digital assets among consumers are growing, but it is still too early to talk about mass distribution. In particular, they mention PayPal's decision to add the purchase and sale of bitcoin as "one of the first non-trading large-scale scenarios for the use of cryptocurrencies in the United States."

"We expect that strategic investments in cryptocurrencies will have a limited effect in the short term on credit profiles, given the modest amounts of capital placed and the long time of decommissioning. However, the addition of cryptocurrency opportunities opens up growing sources of revenue for such companies, even if the return on investment and the risks of legal compliance remain unclear, " the agency adds.

Although analysts doubt the mass distribution of cryptocurrencies at the current stage, they recognize their potential to speed up payments, reduce fees and eliminate intermediaries in the round-the-clock implementation of money transfers. According to Fitch, the full implementation of these capabilities will require appropriate regulation.

"The inability to easily use digital currencies in retail payments, the significant potential for exchange rate volatility, limited regulation and a lack of knowledge among the general public are holding back the massive spread of cryptocurrencies. Increased regulation may limit some of the benefits, especially if digital currency issuers have to obtain banking licenses, maintain reserves, and / or follow other strict requirements applied in the banking industry," Fitch wrote.

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