Opinion: It is necessary to pass stable currency legislation after PayPal launches stable currency

Author: Sarah Wynn, THE BLOCK; Compiler: Songxue, Jinse Finance

House Financial Services Committee Chairman Patrick T. McHenry, R-N.C., emphasized the need for legislation to regulate stablecoins in a statement Monday.

McHenry says the company is at a “crossroads” after PayPal US announced the launch of a stablecoin.

House Financial Services Committee Chairman Patrick T. McHenry, R-N.C., emphasized the need for legislation to regulate stablecoins following PayPal’s launch on Monday. **

“This announcement is a clear signal that stablecoins — if issued within a clear regulatory framework — have the potential to become the backbone of our 21st century payments system,” McHenry said in a statement on Monday.

“We are currently at a crossroads to keep America at the forefront of digital asset innovation. Congress is making significant bipartisan progress on legislation to ensure America leads the financial system of the future. We must get this job done,” McHenry added.

Payments company PayPal announced Monday that it is partnering with Paxos to launch a U.S. dollar stablecoin. The stablecoin will be pegged to the U.S. dollar and made available to PayPal’s U.S. customers “gradually,” the company said.

PayPal first explored issuing a stablecoin in 2021, but reportedly suffered setbacks following heightened regulatory scrutiny.

The Stablecoin Act is developing, but has had some setbacks

The House Financial Services Committee late last month proposed a regulatory framework for payment stablecoins, known as the Payments Stablecoin Clarity Act, which McHenry said would protect consumers through federal guardrails while promoting innovation in the United States.

Democrats, including Rep. Maxine Waters (D-Calif.), the committee’s former chair, expressed concern last month that companies such as Amazon and Facebook could issue their own digital currencies under the current bill.