According to Reuters, PayPal’s USD-pegged digital currency token – PayPal USD (PYUSD) is likely to succeed thanks to the status of the payment “giant” in the eyes of the US authorities, while Facebook has failed. with the Libra project (new name is Diem).
In 2019, Facebook launched the stablecoin Libra but quickly faced fierce opposition from lawmakers. Facebook’s ambitions to revolutionize the global financial system have policymakers worried that the platform could control the monetary system and invade users’ privacy. Under great pressure, Facebook sold the Diem project to Silvergate Capital for $182 million in February 2022
A former official said the decision to approve Libra coincided with the transfer of power to US President Joe Biden in January 2021, although the US Federal Reserve (Fed) has been studying the issue for some time, The final decision was left in the hands of the new administration. US Treasury Secretary Janet Yellen wanted more time to fully analyze the issues surrounding stablecoins, she repeatedly called on the US Congress to create a comprehensive regulatory framework for stablecoins.
Some former officials, CEOs, and analysts argue that PayPal has an edge over Facebook as policymakers are more familiar with stablecoins than in 2019, the push to create stablecoin regulations in the US also enhances legitimacy in the eyes of legislators.
PayPal USD will be issued by the Paxos Trust company, backed by USD and US Treasury, and subject to the supervision of the Regulatory Authority of Vietnam. Financial Services h bang New York (NYDFS).
After TerraUSD collapsed in 2022, Yellen said stablecoins pose no systemic risk. Since then, concerns that stablecoins could replace traditional money have subsided, with the US Treasury Department and US Congress agreeing that regulators should carefully monitor stablecoins.
In August, the Fed outlined the process for state-owned banks to trade in stablecoins. The US House of Representatives Financial Services Committee proposed a bill in July that would give the Fed more power to oversee stablecoins while maintaining the authority of the state regulator. Representative Patrick McHenry said the US Congress should quickly pass a bill for stablecoins to reach their full potential
