Congresswoman Maxine Waters Criticizes PayPal's Entry into Dollar-Pegged Stablecoin Arena Without Federal Regulatory Approval

cryptonews.com:

On Wednesday, Democratic Congresswoman Maxine Waters (D-CA) criticized PayPal's launch of its new dollar-backed stablecoin, PYUSD, as she believed the company should have waited for federal regulatory approval before proceeding.

"I am deeply concerned that PayPal has chosen to launch its stablecoin while there is still no Federal framework for regulation," she said in a written statement.

PayPal took a groundbreaking step on Monday by introducing its stablecoin named PYUSD, which signifies the first instance of a major global payment firm developing its stablecoin. 

The stablecoin, PYUSD, will be managed by Paxos Trust, a New York-based crypto financial services company, and its value will be strongly supported by deposits in U.S. dollars, along with short-term Treasuries and similar cash assets. 

Holders of PYUSD will have the convenience of converting it into U.S. dollars and within PayPal's network, including bitcoin (BTC), bitcoin cash (BCH), ether (ETH), and Litecoin (LTC).

Waters, the leading Democrat on the House Financial Services Committee, highlighted that PayPal boasts 435 million global customers, surpassing all major banks' total online account counts combined.

"Given PayPal's size and reach, Federal oversight and enforcement of its stablecoin operations is essential."

She emphasized on Wednesday that federal agencies must supervise stablecoin issuers. 

"Stablecoins introduce a new type of currency, underscoring the necessity for federal regulations," she stated. 

"The Federal Reserve, our central bank responsible for monetary policy and money supply, must have the capability to fulfill its role."

Lawmakers were spurred to take action last year following the $40 billion collapse of Terra's algorithmic stablecoin, UST.