US Congresswoman Raises Concerns About Paypal Stablecoin In The Absence Of Regulation
10 August 2023 - 10:00PM
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Earlier this week, popular American payment giant Paypal unveiled
the launch of its USD-pegged PYUSD stablecoins to investors. In
response, Democrat congresswoman Maxine Waters has raised palpable
concerns that may or may not threaten the stablecoin’s operations.
Waters Raises Regulatory Concerns Reacting to the news of Paypal’s
PYUSD stablecoin launch, congresswoman Maxine Waters noted that the
launch comes at a time when there was no legislative mechanism to
regulate these assets. She stated that “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.” She further noted that
“stablecoins represent the issuance of a new form of money, making
it integral that there are federal guardrails.” Related
Reading: Solana Beats Out Ethereum To Emerge As Best Performer In
Terms Of TVL Waters’ recent comments are in contrast with those of
the House Financial Services Committee Rep. Patrick McHenry, who
had earlier lauded PayPal’s launch. According to him, the recent
announcement was “a clear signal that stablecoin, if issued under a
clear regulatory framework, holds promise as a pillar of our 21st
century payment system” Last month, the US House Financial Services
Committee also introduced a bill to set up a federal regulatory
framework for stablecoins, focusing on guidelines for registration
and licensing for stablecoin issuers. Although stablecoins
have been around for several years, they have not been able to
enjoy significant attention within the mainstream consumer payment
ecosystem. Similar efforts by popular non-cryptocurrency firms,
such as Meta Platforms, to launch stablecoin services faced harsh
resistance from policymakers and global financial regulators.
In the face of regulatory uncertainty, it is always critical
whenever a lawmaker has something to say about virtual currencies.
PYPL price remains volatile amid regulatory concerns | Source:
PayPal Holdings, Inc. on Tradingview.com PayPal To Expand Into The
Growing Stablecoin Industry According to a report published on
August 9 by popular market analyst Bernstein, the stablecoin
industry is projected to reach a $2.8 trillion valuation in the
next five years. This represents a whooping 22x increase from the
present $125 billion valuation of the industry, and PayPal is
looking to take advantage of this expected increase through its
recent release of the PYUSD stablecoin. Related Reading:
Billionaire Investor Wishes He Bought Bitcoin Early On, Here’s Why
The leading payment giant revealed that the stablecoin will be
“100% backed by US dollar deposits, short-term US Treasuries, and
similar cash equivalents.” The coins will be redeemable 1:1 for US
dollars and issued by US-based Paxos Trust Co. Consumers will also
be able to convert any crypto supported by PayPal to and from
PayPal USD (PYUSD). However, aside from the current
legislative tussle, PayPal will also face competition from existing
players such as Tether and Circle. Tether’s USDT and Circle’s USDC
are the largest stablecoins, with market caps of over $83 billion
and $26 billion, respectively. Featured image from Unsplash,
chart from Tradingview.com
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