The Australian Prudential Regulation Authority (APRA) is seeking to oversee Facebook Libra stablecoin regulations in Australia. Moreover, the Authority presented a possible regulatory framework dedicated to fintech and regulatory technology (regtech). The framework covers topics ranging from digital wallets to data protection.
21 January, 2020 | AtoZ Markets – APRA, one of the top regulators, is watching over payment systems in Australia. APRA has submitted a proposal to the Senate Select Committee on Financial and Regulatory Technology. The Authority has reviewed the digital payment mechanism as “stored valued facilities.” It expects digital wallets to contain a large amount of Libra in the future.
Australian Regulator May Oversee Facebook’s Calibra Wallet
APRA admits that digital wallets are an increasingly important part of the financial system. Thanks to the growing popularity of mobile applications and online shopping. However, the regulator sees two distinct types of digital wallets:
“Some, but not all, digital wallets have a value stored on behalf of customers and are prepaid facilities. Others (such as Apple Pay) contain customers’ credit/debit card data and only facilitate payments from that nominated account”.
Regulators made this assumption following a request for a new regulatory framework for such digital wallets by the Select Committee of Financial Regulators. The submission stated:
“APRA’s role would be to supervise the wallets which are widely used as a means of payment and store significant value (potentially the Facebook Calibra proposal) . Moreover, the framework would not be expected to capture digital wallets that are primarily used to pass payments through (e.g. Apple Pay).”
Small transactions such as gift cards and road tolls are subject to minimum regulations. Any large deposit storage over $50 million value assets (e.g. Libra in Calibra wallets) would be under the attention of APRA and ASIC. Libra would incur a higher level of scrutiny from Australian financial authorities. The new framework would oversee Facebook Libra stablecoin regulations in Australia.
Digital Wallets Data Protection
The regulator also claims that its data collection efforts provide opportunities for regtech to support the sector. APRA is working with several other government agencies to develop a data governance approach. It established a standing committee with the Reserve Bank of Australia, the Australian Bureau of Statistics, the Australian Treasury and the Australian Securities and Investments Commission. The activity of the committee is to coordinate data collection activities between different agencies.
Lawmakers have responded harshly to Libra stablecoin debut and subsequent efforts to gain approval in several jurisdictions around the world. At the end of December, the President of Switzerland said that Libra has failed and will not be approved.
However, the parties involved in Libra continue to pursue its development despite regulatory discontent. Besides, Facebook said it would not launch Libra until all regulatory issues are clear. Recently, the Libra Association has formed a new committee to guide the network’s technical development.
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