Congresswoman Waters 'deeply concerned' about PayPal's stablecoin launch

FILE PHOTO: Representative Maxine Waters (D-CA) walks in the chamber of the U.S. House of Representatives ahead of President Joe Biden's first State of the Union Address in the U.S. Capitol in Washington, DC, U.S, March 1, 2022. Sarahbeth Maney/Pool via REUTERS

(Reuters) - Democrat Congresswoman Maxine Waters said on Wednesday she was "deeply concerned" about payment giant PayPal launching its own stablecoin in the absence of a federal framework to regulate digital assets.

Earlier this week, PayPal became the first major financial technology firm to embrace digital currencies for payments and transfers with the launch of a U.S. dollar stablecoin, dubbed PayPal USD.

"Given PayPal's size and reach, Federal oversight and enforcement of its stablecoin operations is essential in order to guarantee consumer protections and alleviate financial stability concerns," Waters said in a statement.

PayPal did not immediately respond to a Reuters request for comment on the matter.

While stablecoins - crypto tokens whose monetary value is pegged to a stable asset - have been around for years now, they are yet to successfully make headway into the mainstream consumer payments ecosystem.

Similar attempts by other well-known non-crypto companies, including Meta Platforms, to launch a stablecoin have met fierce opposition from financial regulators and policymakers around the world.

Last month, the U.S. House Financial Services Committee also advanced a bill to establish a federal regulatory framework for stablecoins, which will focus on rules for the registration and approval process for stablecoin issuers.

(Reporting by Manya Saini in Bengaluru; Editing by Shinjini Ganguli)

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