Democratic Congresswoman and House Financial Services Committee Ranking Member, Maxine Waters, has expressed her strong criticism towards PayPal’s stablecoin. Waters raised concerns about the launch of a stablecoin by PayPal, particularly emphasizing the absence of a Federal framework for the regulation, oversight, and enforcement of such digital assets. She argued that Federal oversight and enforcement are crucial in order to protect users and ensure financial stability. Waters highlighted the potential risks consumers may face without proper legislation, stressing that stablecoins represent the issuance of a new form of currency.
A significant part of Waters’ argument is based on the substantial influence of PayPal in the financial industry. With a customer base of 435 million worldwide, PayPal holds more customers than all online accounts held by customers of “megabanks.” This reach raises concerns for Waters, as she believes that without proper regulation, PayPal’s stablecoin could pose risks to users and the overall stability of the financial market.
Waters highlighted her and other Democrats’ efforts in the House Financial Services Committee to develop legislation that aims to protect users in the context of stablecoins. However, she criticized Republican committee members for promoting a separate bill that effectively endorses stablecoins, including PayPal’s. Waters argued that this bill restricts the Federal Reserve from carrying out its enforcement and oversight duties, an action she believes undermines the central bank’s role. She also cautioned against the potential impact of wider stablecoin adoption on inflation and employment.
Despite Waters’ concerns, PayPal has clarified that its stablecoin will only be available to users in the United States. This narrows the scope of its potential impact, as it will be utilized by a smaller group in practice. Nevertheless, Waters maintains her position that comprehensive legislation is necessary to safeguard the interests of users.
Waters expressed doubts regarding the Republican bill promoted by House Financial Services Committee Chair Patrick McHenry shortly after PayPal’s stablecoin announcement. She contended that the bill, in its current form, has “no chance” of becoming law and called for bipartisan negotiations to shape future legislation.
Congresswoman Maxine Waters is deeply concerned about the launch of PayPal’s stablecoin without a proper Federal framework for regulation, oversight, and enforcement. She believes that comprehensive legislation is essential to protect users and maintain financial stability. Waters also criticized a separate bill backed by Republican committee members, arguing that it hampers the Federal Reserve’s ability to carry out its duties effectively. Ultimately, Waters emphasizes the need for bipartisan efforts to address the regulatory challenges posed by stablecoins and ensure the well-being of consumers.
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