Rep. Maxine Waters, D-Calif., recently expressed concern about PayPal's launch of its own stablecoin, called PYUSD. Waters emphasized the need for federal oversight due to PayPal's substantial size and global reach, calling for consumer protections and addressing financial stability concerns, according to an Aug. 9 Coin Desk report.
"Given PayPal’s size and reach, federal oversight and enforcement of its stablecoin operations is essential in order to guarantee consumer protections and alleviate financial stability concerns," Waters said in the Coin Desk report. "Moreover, the Republican bill undermines the Fed's role as our central bank, making it harder to protect the economy against inflation or support maximum employment if stablecoins are broadly adopted."
She expressed these concerns due to the absence of a comprehensive federal framework for overseeing, regulating and enforcing such digital assets, Coin Desk reported.
This is reportedly the first instance of a global payments company issuing its own stablecoin, according to Coin Desk. Waters, who holds a prominent position on the House Financial Service Committee, highlighted the fact that PayPal boasts a customer base of 435 million individuals globally, surpassing the combined online account numbers of major banks.
Recently, the congressional committee successfully endorsed a proposed law aimed at establishing guidelines for stablecoins in the United States, Coin Desk reported. It was noted some Democratic colleagues of Waters went against her stance and aligned with Republicans to support this legislation.
While this bill is now qualified for a voting session within the House, it may face resistance from Senate Democrats if it secures approval, according to Coin Desk.
Expressing her viewpoint, Waters criticized the bill put forth by the Republican faction. She highlighted its endorsement of stablecoins such as PYUSD, which operate within state regulatory frameworks, but simultaneously inhibit the Federal Reserve's ability to supervise them, Coin Desk said.
In a differing viewpoint, Rep. Patrick McHenry, R-N.C., who leads the House Financial Services Committee, conveyed his endorsement of PayPal's fresh stablecoin, Coin Desk noted. McHenry emphasized this declaration serves as a distinct indication that stablecoins, when introduced within a transparent regulatory structure, offer potential as a foundational element within our modern 21st-century payment ecosystem, as articulated in his written communication.
