Maxine Waters said she is deeply concerned about the launch of PayPal USD (PYUSD) without a regulatory framework that should provide oversight of cryptocurrencies and protect investors. The PayPal payment system announced the launch of PYUSD on August 7, specifying that the stablecoin will be issued by the Paxos Trust Company. It will be backed by U.S. dollar deposits, short-term U.S. Treasury bonds and similar cash equivalents.
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“Without formal legislation establishing clear consumer protection rules at the federal level, users could suffer at the hands of abusers. Stablecoins are a new form of money, so there is bound to be some sort of framework for them,” Waters said.
She also criticized a bill to regulate stablecoins introduced by U.S. lawmakers last month. Waters said the bill would harm consumers more than protect them because it would prevent the U.S. Federal Reserve (Fed) from monitoring and enforcing any federal standards.
PYUSD’s launch brings to mind the failed launch of the Libra stablecoin from Meta Platforms Inc. which was later renamed Diem. Waters has been one of the most vocal opponents of the project, calling on the tech giant to halt Diem’s development because of the potential risks to the international economy. Due to opposition from regulators, Diem Association abandoned the launch of the stablecoin.
Earlier, Maxine Waters called on current US President Joe Biden to ban banks from holding cryptoassets and the collateral for stackablecoins.