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Congresswoman Maxine Waters Says She’s ‘Deeply Concerned’ About PayPal’s New Stablecoin
The top Democrat on the House Financial Service Committee said federal rules should be in place before a company the size of PayPal issues a stablecoin.
Rep. Maxine Waters (D-California) released a statement Wednesday saying she’s “deeply concerned that PayPal has chosen to launch its own stablecoin while there is still no federal framework for regulation, oversight, and enforcement of these assets.”
PayPal (PYPL) introduced its new dollar-backed stablecoin, PYUSD, on Monday, the first time a global payments firm has issued its own stablecoin.
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Waters, the top Democrat on the House Financial Service Committee, noted that PayPal has 435 million customers around the world, more than the number of online accounts of all the largest banks combined.
“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 wrote.
The House committee recently approved legislation seeking to set up guardrails for U.S. stablecoins, with several of Waters' fellow Democrats bucking her opposition to vote with Republicans. That bill is now eligible for a floor vote in the House, though it would be unlikely to get a warm welcome from Senate Democrats if approved there.
Waters criticized the Republican-sponsored bill for approving stablecoins like PYUSD that are issued under state regimes but preventing the Federal Reserve from overseeing them.
"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 added.
By contrast, Rep. Patrick McHenry (R-North Carolina), chair of the House Financial Services Committee, expressed support for PayPal’s new stablecoin in a statement issued on Monday.
“This announcement is a clear signal that stablecoins — if issued under a clear regulatory framework — hold promise as a pillar of our 21st century payments system,” McHenry wrote.
Read More: Why PayPal's Stablecoin Scares Washington and Could Shake Legislative Talks
UPDATE (August 9, 2023, 17:12 UTC): Adds information on status of the U.S. stablecoin bill.
Nelson Wang
Nelson edits features and opinion stories and was previously CoinDesk’s U.S. News Editor for the East Coast. He has also been an editor at Unchained and DL News, and prior to working at CoinDesk, he was the technology stocks editor and consumer stocks editor at TheStreet. He has also held editing positions at Yahoo.com and Condé Nast Portfolio’s website, and was the content director for aMedia, an Asian American media company. Nelson grew up on Long Island, New York and went to Harvard College, earning a degree in Social Studies. He holds BTC, ETH and SOL above CoinDesk’s disclosure threshold of $1,000.
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Crypto Industry Asks President Trump to Stop JPMorgan’s 'Punitive Tax' on Data Access
A coalition of fintech and crypto trade groups is urging the White House to defend open banking and stop JPMorgan from charging fees to access customer data.
What to know:
- Ten major fintech and crypto trade associations have urged President Trump to stop big banks from imposing fees that could hinder innovation and competition.
- JPMorgan's plan to charge for access to consumer banking data may debank millions and threaten the adoption of stablecoins and self-custody wallets.
- The CFPB's open banking rule, which mandates free consumer access to bank data, is under threat as banks have sued to block it, and the CFPB has requested its vacatur.
