Democrat Congresswoman Maxine Waters said on Wednesday she was “deeply concerned” about PayPal launching its own stablecoin.
PayPal launch of its PYUSD stablecoin has drawn criticism from Congress, with major concern hinged on the absence of a regulatory framework on stablecoins.
PayPal’s stablecoin launch prompts opposition
Rep. Maxine Waters has expressed concern about PayPal’s launch of its stablecoin earlier this week.
The Congresswoman represented Democratic members of the House Financial Services Committee views of the stablecoin. In a statement on Thursday, Maxine Waters said that she was “deeply concerned” about the PayPal launch without the necessary regulatory framework in place.
“I and Democrats on the Committee have been working diligently for 15 months on legislation to help to address this issue, and create an environment where consumers and the economy would be protected in the event a corporation like PayPal decided to launch its own stablecoin,” Waters said.
Waters had previously in late July called the bill on stablecoin “a trove of anti-ESG, anti-investor, and wholly anti-capitalist bills.”
The top Democrat argued that the stablecoin bill which is being championed by Republican from North Carolina, Patrick MCHenry, is toxic and problematic which may harm customers. She noted that the bill gives stablecoins like PYUSD the ability to exist without the oversight of the Federal Reserve.
“Without legislation on the books that establishes clear and strong consumer protections at the federal level, consumers are at greater risk of harm at the hands of bad actors,” Waters said.
MCHenry argues otherwise
Committee Chair Patrick MCHenry said that the release of PayPal’s stablecoin represents “promise” for the future of payments if it’s established under a clear regulatory regime. He emphasized that the passage of the Clarity for Payment Stablecoins Act, which has been left untouched since July 27.
The stablecoin draft bill was released earlier this year by house republicans. But Waters has pushed back that the bill would force democrats to “start from scratch.”
This isn’t the first time a corporation will try to launch its own stablecoin. Meta (Facebook at the time) tried to launch its own Libra stablecoin but was met with fierce opposition from regulators and policymakers. Waters grilled Meta CEO Mark Zuckerberg on Libra in a Congress hearing in 2019, forcing the company to abandon the project in 2022.
Within the first 48 hours of the release of PYUSD, scammers have created many fake tokens in an attempt to capitalise on the media attention.
Disclaimer: CryptoPlug does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.