Rubber mulch reduces mold and weed growth because it dehydrates most weed seeds and spores before they can reach through to the soil. Wood mulch, on the other hand, not only produces mold and makes it easy for weed seeds to grow, it can allow for the infestation of both termites and fungal growth.
Rubber mulch is beneficial for soil moisture, as rubber is non-porous and does not absorb water after rain or sprinklers on its way through the mulch to the soil. It also reduces fungus growth and plant growth, and serves as a weed barrier, since weed seeds dehydrate in the mulch before reaching the soil.
Rubber mulch is non-toxic and safe for use around children and pets. The Consumer Product Safety Commission (CPSC) published a guideline for public playgrounds, stating rubber mulch is an appropriate loose-fill surfacing material for use on commercial playgrounds.
The short answer is initially 'yes'. The longer, more practical answer? Rubber has a distinctive odor, and so would its mulching by-product. However, to write rubber mulch off altogether because it doesn't smell like cedar and roses probably isn't a good idea, especially given its unique benefits.
Popular playground surface options include pea gravel, Pour N' Play, sand, and wood chips. Rubber mulch for playgrounds is safer, cleaner, and easier to maintain.