Congresswoman Maxine Waters said that PayPal launching PYUSD in the absence of federal regulatory laws is worrisome.
Earlier this week, American payments giant PayPal launched its USD-pegged PYUSD stablecoin in the market issued by Paxos Trust Co. On Wednesday, August 9, Democrat congresswoman Maxine Waters, however, raised concerns about the development.
The Congresswoman added that she was deeply concerned with PayPal launching its stablecoin in the absence of a crypto regulatory framework. “Given PayPal’s size and reach, Federal oversight and enforcement of its stablecoin operations is essential to guarantee consumer protections and alleviate financial stability concerns,” Waters said in a statement.
Although stablecoins have been in existence for several years, they have not gained significant traction within the mainstream consumer payment landscape. Efforts by prominent non-crypto entities like Meta Platforms to introduce their stablecoins have faced strong resistance from global financial regulators and policymakers.
Last month the U.S. House Financial Services Committee also produced a bill in order to establish a regulatory framework for stablecoins. This bill majorly focuses on the rules for the registration and approval process for stablecoin issuers.
PayPal to Proliferate In Expanding Stablecoin Market
In their research report published Wednesday, August 9, Bernstein noted that the stablecoin market is likely to grow to $2.8 trillion over the next five. This is a staggering 22x jump from the current $125 billion of the stablecoin market.
“We expect major global financial and consumer platforms to issue co-branded stablecoins to power value-exchange on their platforms,” analysts led by Gautam Chhugani wrote. Thus, it would give PayPal major room to grab a share of the expanding stablecoin market.
PayPal will be straight away competing with existing players like Tether and Circle. However, Tether CTO Paolo Ardoino said that PayPal doesn’t pose much threat to them. While the PYUSD stablecoin focuses majorly on the US market, Tether’s USDT focuses on emerging markets. In fact, PayPal’s entry could pose a major threat to Circle’s USDC which has a strong presence in the US.