Rep. McHenry proposes stablecoin legislation in response to PayPal’s action

On Monday, Patrick T. McHenry, R-North Carolina, chair of the House Financial Services Committee, emphasised the need of passing legislation to regulate stablecoins.

McHenry declared the United States to be “at a crossroads” when PayPal unveiled its stablecoin. After PayPal unveiled its stablecoin on Monday, House Financial Services Committee Chair Patrick T. McHenry, R-N.C., stressed the need of passing legislation to regulate stablecoins.

McHenry said in a statement released on Monday that the news is “a clear signal that stablecoins—if issued under a clear regulatory framework—hold promise as a pillar of our 21st century payments system.”

To continue putting America at the forefront of digital asset innovation, we are at a crossroads. Significant, bipartisan progress is being made in Congress on legislation to guarantee the United States remains at the forefront of the future financial system. McHenry said, “We must complete the task.”

On Monday, PayPal and Paxos announced the introduction of a U.S. dollar stablecoin. The corporation has said that it would “gradually” make the token accessible to PayPal’s U.S. clients and that it will be tethered to the dollar.

PayPal allegedly considered launching a stablecoin in 2021, but the plan was scrapped due to rising regulatory scrutiny.

McHenry claims that the Clarity for Payment Stablecoins Act, which was cleared by the House Financial Services Committee at the end of last month, will safeguard consumers through legislative guardrails while supporting innovation in the United States.

Rep. Maxine Waters (D-Calif.), the former leader of the House Financial Services Committee, voiced worry last month that Amazon and Facebook may create their own digital currencies under the present measure.

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