Rep. McHenry pushes for stablecoin bill following PayPal move

House Financial Services Committee Chair Patrick T. McHenry, R-N.C., underscored the need to pass legislation to regulate stablecoins following PayPal’s move on Monday to launch its own.

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

"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 the U.S. leads the financial system of the future. We must finish the job," McHenry added. 

Payments firm PayPal announced its launch of a U.S. dollar stablecoin in conjunction with Paxos on Monday. The token will be pegged to the dollar and “gradually” made available to PayPal’s customers in the U.S., the company said.

PayPal first explored the release of a stablecoin in 2021 but then reportedly faced a setback after increased regulatory scrutiny. 

Stablecoin bill on the move, with some setbacks of its own

The House Financial Services Committee advanced a regulatory framework for payment stablecoins late last month, called the Clarity for Payment Stablecoins Act, which McHenry says would protect consumers via federal guardrails while fostering innovation in the U.S.

Democrats, such as former chair of that committee Rep. Maxine Waters, D-Calif., raised concerns last month that companies like Amazon and Facebook could issue their own digital currencies, under the current bill.