Maxine Waters said she is deeply concerned about the launch of PayPal USD (PYUSD) without a regulatory framework to provide oversight for cryptocurrencies and protect investors. PayPal announced the launch of PYUSD on August 7, specifying that the stablecoin will be issued by Paxos Trust. It will be backed by US dollar deposits, short-term US Treasury bonds and similar cash equivalents.
“Without formal legislation establishing clear federal consumer protection rules, users could be harmed at the hands of hackers. Stablecoins are a new form of money, so there must be some kind of framework for them,” Waters said.
She also criticized the stablecoin regulation bill introduced by US lawmakers last month. The bill would harm consumers more than protect them, Waters said, because it would prevent the US Federal Reserve from monitoring and enforcing any federal standards.
The launch of PYUSD is suggestive of the failed launch of the Libra stablecoin from Meta Platforms Inc., which was later renamed Diem. Waters was one of the project’s most vocal opponents, calling on the tech giant to stop developing Diem because of the potential risks to the international economy. Due to the opposition of regulators, the Diem Association refused to launch a stablecoin.
Earlier, Maxine Waters called on the current US President Joe Biden to ban banks from holding crypto assets and collateral for stablecoins.
Source: Bits
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