Congresswoman Maxine Waters Says She Is “Deeply Concerned” About PayPal’s New Stablecoin

PayPal launched​ its ​new dollar-backed stablecoin PYUSD on Monday, the first time‌ a global payments company has issued its own stablecoin.

Waters, the top Democrat on the House ​Financial Services Committee, noted that PayPal has 435 million⁤ customers worldwide, more⁣ than the number of ‍online accounts for all of the largest ⁣banks combined.

Given PayPal’s size and reach, government oversight and enforcement of ​its stablecoin operations is ​critical to ensure consumer protection and address financial stability concerns,” Waters wrote.

The House Committee⁤ recently passed legislation aimed at ‌establishing guard rails for US‌ stablecoins, with several of ⁤Waters’ fellow​ Democrats defying their opposition and voting ​with Republicans.

Waters criticized the Republican-backed bill for ‌allowing stablecoins like ​PYUSD to be issued under state⁤ regimes ​but preventing the Federal Reserve from overseeing them.

“Furthermore, the Republican bill undermines the ⁣Fed’s role as‌ our central bank by making it more difficult to protect the economy from ⁢inflation ​or support maximum employment if stablecoins are widely adopted,” she added.

In contrast, Rep. Patrick McHenry (R-North Carolina),‍ chairman of the House⁤ Financial Services Committee, expressed support for PayPal’s new stablecoin in a statement released Monday.

“This announcement⁤ is a clear signal that stablecoins – if⁣ issued under a clear regulatory framework – have⁤ promise as a pillar of ‍our 21st century payments system,” ​McHenry wrote.

UPDATE⁣ (9 Aug 2023, 17:12 UTC): Adds information on the status of the US stablecoin law added.