5 ms·

SEC subpoenas PayPal over its USD-pegged stablecoin

18 points by fairytalemtg 3y ago

zomgbbq 3y ago
This coin is issued by Paxos. Paxos, by the way, hands down has the worst interview process of any company I've spoken to in my 30 years of working in engineering. So while I am rooting for regulated stable-coins as a technology, I have to admit some feelings of schadenfreude.
- matthewdgreen 3y ago
  The coin is issued by Paxos on chain but it’s not clear to me whether Paxos or PayPal holds the backing dollars. I would imagine PayPal being essentially a bank does a lot of that work, and so it makes sense for the SEC to subpoena PayPal itself. Of course the real problem here is the current situation where NYDFS regulates legal stablecoins in NY, and then the SEC pursues a different theory in which they’re maybe unlicensed securities, and meanwhile other Federal regulators have jurisdiction over banking and commodities. The whole thing is a mess.
- klyrs 3y ago
  On the other hand, PayPal stole my money so I must admit the same feeling.
- phatskat 3y ago
  I’m curious to hear more about the interview process and how it went.
V__ 3y ago
Can someone explain what the use-cases for stablecoins is?
- LastNevadan 3y ago
  The price of crypto coins (bitcoin, etc) is quite volatile. Stablecoins allow you to price products and services without caring about volatility of the currency.
  - toomuchtodo 3y ago
    This stablecoin competes with dollars, not crypto. It is a solution looking for a problem. Why would one store value in it instead of an FDIC insured deposit account or a money market account composed of safe government securities? It has no guarantees in the event of an unwinding and does not earn interest. If a stablecoin looks like a dollar, it should be regulated like a dollar, not crypto. Paypal continues to avoid being regulated as a bank; unsophisticated consumers don't need to take on more risk for Paypal and Paxos' benefit.
    - ender341341 3y ago
      I think it's more of an exchange medium, like I have a bunch of bitcoins but you don't want to take the risk of bitcoins on so you make me convert to a stablecoin where you can then convert it to usd at pretty much whatever time you want. but you're right it's mostly a solution in search of a problem, you're losing the 'make distrubuted untrusted sources trustable with lots of math/polution' property that crypto claims to solve and with a classic bank with lots of extra math/polution when a strong system of money transfers for USD already exists with a fraction of the computational/polution cost.
    - Kirby64 3y ago
      It’s an exchange medium exactly like a money market account, though. Just like most brokerages don’t just let you have “cash” in your account, you instead have a cash equivalent in the form of a cash-adjacent money market fund so you can perform trades immediately.
      - deleted 3y ago
        [deleted]
- deleted 3y ago
  [deleted]

18 points by fairytalemtg 3y ago

This coin is issued by Paxos. Paxos, by the way, hands down has the worst interview process of any company I've spoken to in my 30 years of working in engineering. So while I am rooting for regulated stable-coins as a technology, I have to admit some feelings of schadenfreude.

matthewdgreen 3y ago
The coin is issued by Paxos on chain but it’s not clear to me whether Paxos or PayPal holds the backing dollars. I would imagine PayPal being essentially a bank does a lot of that work, and so it makes sense for the SEC to subpoena PayPal itself. Of course the real problem here is the current situation where NYDFS regulates legal stablecoins in NY, and then the SEC pursues a different theory in which they’re maybe unlicensed securities, and meanwhile other Federal regulators have jurisdiction over banking and commodities. The whole thing is a mess.
klyrs 3y ago
On the other hand, PayPal stole my money so I must admit the same feeling.
phatskat 3y ago
I’m curious to hear more about the interview process and how it went.

V__ 3y ago

Can someone explain what the use-cases for stablecoins is?

LastNevadan 3y ago
The price of crypto coins (bitcoin, etc) is quite volatile. Stablecoins allow you to price products and services without caring about volatility of the currency.
- toomuchtodo 3y ago
  This stablecoin competes with dollars, not crypto. It is a solution looking for a problem. Why would one store value in it instead of an FDIC insured deposit account or a money market account composed of safe government securities? It has no guarantees in the event of an unwinding and does not earn interest. If a stablecoin looks like a dollar, it should be regulated like a dollar, not crypto. Paypal continues to avoid being regulated as a bank; unsophisticated consumers don't need to take on more risk for Paypal and Paxos' benefit.
  - ender341341 3y ago
    I think it's more of an exchange medium, like I have a bunch of bitcoins but you don't want to take the risk of bitcoins on so you make me convert to a stablecoin where you can then convert it to usd at pretty much whatever time you want. but you're right it's mostly a solution in search of a problem, you're losing the 'make distrubuted untrusted sources trustable with lots of math/polution' property that crypto claims to solve and with a classic bank with lots of extra math/polution when a strong system of money transfers for USD already exists with a fraction of the computational/polution cost.
  - Kirby64 3y ago
    It’s an exchange medium exactly like a money market account, though. Just like most brokerages don’t just let you have “cash” in your account, you instead have a cash equivalent in the form of a cash-adjacent money market fund so you can perform trades immediately.
    - deleted 3y ago
      [deleted]
deleted 3y ago
[deleted]