Representative Patrick McHenry, (R-NC), Chairman of the U.S. House Financial Services Committee Chairman, endorsed PayPal’s recently announced stablecoin on August 7.
McHenry said in a statement:
“[PayPal’s] announcement is a clear signal that stablecoins – if issued under a clear regulatory framework – hold promise as a pillar of our 21st century payment system.”
McHenry also used the announcement of PayPal’s stablecoin as an opportunity to advance his committee’s pro-stablecoin bill, the Clarity for Payment Stablecoins Act. The Financial Services Committee approved the bill on July 27, but it has not yet passed into law.
McHenry said the bipartisan bill recognizes state-level regulation of crypto companies and builds on state regulatory structures. He acknowledged New York’s approach to crypto regulation — a state that has heavily regulated crypto companies through the Department of Financial Services and the Attorney General’s Office.
McHenry also said that clear regulation and strong consumer protections could help stablecoins reach their maximum potential. He said the US “at one crossroads” that will determine whether it will continue to be a digital asset leader and insists Congress to enact legislation providing comprehensive regulation in this area.
PayPal’s stablecoin faced regulatory challenges
This endorsement from the head of a major US government group is significant in light of the fact that PayPal has seemingly faced regulatory challenges before. In February, Bloomberg suggested that PayPal paused work on its yet-to-be-announced stablecoin project due to scrutiny from New York regulatory authorities.
While the House Financial Services Committee does not have the authority to approve such a stablecoin, it is a crucial gatekeeper to financial legislation in the US Congress, and its approval weighs heavily in a full vote on the House floor.
PayPal previously announced the launch of its stablecoin, PYUSD, on August 7.
The chair of the post House Financial Services Committee renews the call for stablecoin legislation after PayPal’s PYUSD announcement first appeared on CryptoSlate.