US Representative Maxine Waters Calls for Stablecoin Regulation After PayPal Debut
Maxine Waters has issued warnings concerning the stablecoin project announced by PayPal. She has maintained that the stablecoin poses a threat to the public if it is controlled by bad actors without regulatory oversight.
The Democrat D-Cali has remarked that she is deeply concerned about the new stablecoin project of PayPal. She has also claimed that concerns around the stablecoin are related to the absence of a regulatory framework issued by federal agencies.
She also claimed that there is currently a lack of legal guide rails to contain and implement these assets. To this effect, she also claimed that she has been working with Democratic Party members and committees on the matter for 15 months.
As per Waters, the team of legislators has been working on ensuring a system where the consumers and economy are safe from the harmful impact of stablecoins issued by PayPal.
In her previous stance, Waters opposed the anti-stablecoin bill. She maintained that Republican Party members have been lobbying for anti-ESG, anti-capitalist, and anti-investor bills by putting pressure on the House Financial Services Committee.
However, she has changed her position recently while maintaining that any form of Republican Party-favored laws will not make it into the legislature. To this end, she asked Chairperson Patrick McHenry and Republicans to restart the negotiation process as a way to make their bidding.
Meanwhile, Republican Party members have granted stablecoins USD issued by PayPal a seal of approval under the state regime. At the same time, they have moved to block the Federal Reserve from implementing federal standards on the projects as per Waters. On the other hand, Fed has initiated a plan to oversee crypto-related activities among banks.
One of these oversights includes applying for approval from the Fed before working with distributed ledgers or related technologies to perform transactions using dollar tokens. Waters has responded by demanding federal guardrails towards the issuance of any new form of money.
Stablecoin Draft Bill
The stablecoin bipartisan draft finalized in April this year became a source of contention between Republicans and Democrats. Democrats raised objections that the bill did not reflect the agreed-upon terms.
On the matter, Waters maintained that the conversation on the matter needs to restart from scratch addressing Subcommittee Chair Rep. French Hill. Both sides agree on the idea that consumer funds should not be commingled and the dominance of USD should not be undermined.
The clash between both sides is regarding the probable impact of stablecoin on the USD. Rep. Stephen Lynch has maintained that allowing stablecoin projects to peg massive reserves to their products without FDIC coverage poses risks.
On this account, the Democrats called for a separation of crypto from the banking network. On the other hand, Representative Ritchie Torres has argued that since stablecoins are not lenders like banks, therefore, they don’t require licensing. There is also the division of opinion on matters such as privacy and KYC compliance for stablecoins.
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