PayPal’s stablecoin sparks concern in the US Congress

USA USA
USA USA

Member of the US House of Representatives Maxine Waters expressed her “deep concern” about the launch of PayPal’s stablecoin. She pointed to the lack of a regulatory framework for such assets.

“The 435 million PayPal customers worldwide exceed the total number of online accounts at all megabanks. Given its size and reach, federal oversight and enforcement of its stablecoin operations is essential to ensure consumer protection and mitigate risks to financial stability,” the congresswoman said.

On August 7, the payments giant announced the launch of the Ethereum-based stablecoin PYUSD, pegged to the US dollar. The issuer of the coin was Paxos blockchain infrastructure company.

In 2022, Waters co-sponsored a bill to regulate stablecoins. The representative of the Democratic Party at that time chaired the House Finance Committee.

The second sponsor of the document was Republican Patrick McHenry, who currently holds this post. In October, the politician stated that the inter-party dialogue regarding financial technologies had reached an impasse. At the first hearings in 2023, the bill also faced criticism.

In July, representatives of the Republican Party introduced their own version of the rules for regulating stablecoins. Waters called the document “poisonous and problematic”. He takes assets out of control Fed and undermines the department’s role as a central bank, the congresswoman stressed.

“I urge Chairman McHenry and the Republicans to return to the negotiating table to develop a bill that actually works. The sooner we can come together, the sooner we can protect consumers and our financial system,” she concluded.

The stablecoin from PayPal caused a controversial reaction from the crypto community. Some felt that PYUSD promotes mass adoption of digital assets, others pointed to the risks of centralization.

Recall that Paxos said that it had held talks with many of the largest technology companies and financial service providers regarding the issuance of “stable coins”.

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