Maxine Waters calls for stablecoin ‘guardrails’ after PayPal debut
Waters says consumers are “at greater risk of harm” at the hands of bad actors without legislation
House Democrat Maxine Waters | mark reinstein/Shutterstock modified by Blockworks
House Democrat Maxine Waters, D-Cali., is “deeply concerned” about PayPal’s new stablecoin.
In a statement on Wednesday, Waters said that her concern stems from the lack of a federal “framework for regulation, oversight and enforcement of these assets.”
“I and Democrats on the Committee have been working diligently for 15 months on legislation to help to address this issue, and create an environment where consumers and the economy would be protected in the event a corporation like PayPal decided to launch its own stablecoin,” Waters said.
Waters previously pushed back against the stablecoin bill, saying that the “extreme…wing of the Republican party” forced the House Financial Services Committee to address “a trove of anti-ESG, anti-investor, and wholly anti-capitalist bills” in late July.
Waters echoed that dissent on Wednesday, contending that there’s “no chance” that Republicans’ current version is signed into law. She urged Republicans and Chair Patrick McHenry R-N.C. to return to the negotiating table.
“Specifically, the Republican bill gives stablecoins like PayPal USD that are issued under state regimes a seal of approval, but blocks the Federal Reserve from overseeing or enforcing any Federal standards,” she continued.
On Tuesday, the Federal Reserve detailed its plans for expanded oversight of crypto-related activities at banks. These measures include requiring state member banks to obtain written approval from the Fed before using distributed ledgers or other technologies to “conduct payments activities as principal, including by issuing, holding or transacting in dollar tokens.”
Waters enforced the need for “Federal guardrails” on any “issuance of a new form of money,” including stablecoins.
The stablecoin draft bill currently making the rounds around Capitol Hill was released by Republicans earlier this year. In April, Waters said that the stablecoin draft would force Democrats to “start from scratch.”
PayPal announced its stablecoin, an Ethereum-based token issued by Paxos, on Monday. The stablecoin, called PayPal USD, can be transferred between external wallets compatible with PayPal. Customers will also be able to buy, send, convert and fund purchases “in the coming weeks.”
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