Aug 10, 2023

Rep. Maxine Waters (D-Calif.) said in a statement that she's "deeply concerned" about PayPal's launch of its own stablecoin while there is still no Federal framework for regulation, oversight, and enforcement of these assets.”

Video transcript

We're talking about Congresswoman Maxine Waters. She says she's quote, deeply concerned unquote about paypal's launch of its own stable coin. Joining us now to discuss is Coindesk global policy and regulation managing editor Nick Day, who is also the editor of coin desks, state of crypto newsletter. Good morning, Nick. Good morning. I have to apologize. I didn't give you the intro of grandeur that Lawrence usually does, but I'm working on it. All right, let's, let's talk at this time. Ok. Thank you, Nick. Let's talk about these comments from Maxine Waters. Walk us through the statement here. What are some of her concerns? Yeah. So Congresswoman Waters, who is the leading Democrat on the House Financial Services Committee, uh basically said in a statement that she's concerned about how paypal paypal launched its stable coin and called out the lack of any kind of federal regulatory framework for stable coins. Uh noting in particular that paypal is large, has 435 million customers uh worldwide. Uh Meaning it has the potential to give a very large swath of the, you know, population of birds access to stable coins or to using these stable coins So, Nick, it's kind of interesting. Right. Because we had, you know, XOs on, on the show talking about, like, just how super regulated they were, like, they were the most regulated, they're regulated because they're, you know, uh, uh, regulated as a trust in New York. So they have prudential regulation and even if you're outside of New York, you're protected and, I mean, like, you don't think that, that argument is resonating at all with, with, with some people in Washington. Yeah. So, and you know, we actually saw a phrase differently but slightly similar concern from uh Congressman Patrick mckendry, who is the leading Republican on the House Financial Services Committee, New York is one state and paypal PAX for that matter are operating under uh you know, a New York State Trust license. Um So uh it's uh I think comparatively fairly comprehensive license, but it's still just a one license. And um because of that, you know, you're talking about one state kind of effectively creating a regulatory framework for the other 50. If paypal and Pao decide, OK, you wanna try and operate in Montana or Wyoming or, you know, wherever I pursuant to the New York Trust license, the concern that we've heard from lawmakers is that, yeah, that was like, yeah, no, I was just gonna say it's interesting just because like, what, what XOs told Ian Allison was that, you know, because it was has this trust regulation and this prudential regulation, it has this kind of like broader reach than, than, than New York, which II I do. Do you understand exactly what he means by that? Yeah, like they're saying like, yeah, uh so this is where we get a little bit into the kind of the details of the New York regulatory framework. So you have the bit license, which is one thing, you have the trust license, which is a different thing. Pax has uh trust license here, which they're referring to and that does give them uh different uh kind of permission so to speak in other states than if they only had a bit license. Um which is how I think they're operating the new various simple coins here. Uh Pax for what its words also did apply for a federal trust uh license to the office of the control of the currency way back when um I'm not quite sure what the status of that is, but it's worth remembering that. Um you know, even Paxel was looking for, you know, to have both the state and federal trust frameworks. All right, Nick, we are gonna leave it there. Thanks very much for joining the show. It was great seeing you this morning. That was Coindesk Global Policy and Regulation. Managing editor Nick Day. Don't forget to sign up for the state of crypto newsletter on Coindesk dot com.

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