US Representative Maxine Waters expressed \”deep concern\” about PayPal’s launch of a stablecoin. She pointed to the lack of a regulatory framework for such assets.
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\”435 million PayPal customers worldwide exceed the total number of online accounts across all megabanks. Given the size and reach, federal supervision and compliance for its operations with ‘stablecoins’ are necessary to guarantee consumer protection and to mitigate risks to financial stability,\” the congresswoman noted.
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On August 7, the payments giant announced the launch of the US dollar-backed stablecoin PYUSD on the Ethereum network. The issuer of the coin is the infrastructure blockchain company Paxos.
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In 2022, Waters co-authored a bill to regulate \”stablecoins.\” At that time, the Democratic representative chaired the House Financial Services Committee.
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The bill’s second sponsor was Republican Patrick McHenry, who holds that post now. In October, the politician noted that the bipartisan dialogue on fintech had stalled. At the first hearings in 2023 the bill also faced criticism.
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In July, Republican lawmakers introduced their own version of stablecoin regulation. Waters called the document \”toxic and problematic.\” It would remove assets from the oversight of the Fed and undermine the agency’s role as the central bank, the congresswoman said.
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\”I urge Chairman McHenry and the Republicans to return to the negotiating table to craft a workable bill. The sooner we can come together, the sooner we will ensure protection for consumers and our financial system,\” she concluded.
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PayPal’s stablecoin has elicited a mixed reaction from crypto-community participants. Some argued that PYUSD would spur widespread adoption of digital assets, while others pointed to centralisation risks.
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Paxos said it had held talks with many of the world’s largest technology companies and financial-services providers regarding the issuance of \”stablecoins\”.