PYUSD and Libra: the same threat to financial stability?

Already opposed to the Libra from FacebookAmerican politics Maxine Waters expresses her concern about the stablecoin PYUSD from PayPallaunched before the creation of a legal framework for these assets.

PayPal run the risk of encountering the same hostility as Facebook with Libra (renamed Diem) a few years earlier? This week, the payments giant introduced its stablecoin dollar, the PYUSD.

This announcement caused a stir in the United States among The House Financial Services Committeethe Committee responsible for economic, banking, securities and stock exchange matters.

A stablecoin without a federal framework

For the Democratic head of the Commission, Maxine Watersthis launch by a global player represents a danger in the absence of an appropriate regulatory framework for stablecoins.

I am deeply concerned that PayPal has chosen to launch its own stablecoin when there is still no federal framework for the regulation, oversight and enforcement of these assets,” she reacted.

The political leader also opposes the proposed law on stable chips carried by the House Committee. Defended by Republican Patrick McHenry, Maxine Waters calls the text “toxic and problematic”.

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Risk to consumers and financial stability

Sound political adversary on the other hand, welcomed PayPal’s announcement, calling it promising as a payment system the crypto of the American group.

But for Waters, legislation should entrust the central bank, the Federal Reservethe supervision of these financial assets. However, the bill put forward by the opposition makes no such provision.

In the absence of legislation establishing clear and strong protections at the federal level, consumers run an increased risk of harm from bad actors,” warns the U.S. Democrat.

In her opinion, due to the size of PayPal and its 435 million customers worldwide – more than the number of online accounts of all the major banks – “it is essential that the federal government oversee” its operations.

Such oversight is warranted to ensure consumer protection and mitigate financial stability issues, defends Maxine Waters, a staunch opponent of Facebook’s Libra project and Mark Zuckerberg’s 2019 congressional hearing.

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