One of Australia’s financial watchdog agencies, the Australian Prudential Regulation Authority (APRA), could soon regulate stablecoin projects such as the controversial Facebook’s led Libra project, Cointelegraph reports.
In a statement submitted to a Senate inquiry committee on fintech, the regulatory body says it has drafted a fresh regulatory framework which would make it possible for it to regulate wallets which are used majorly for payment services like the Libra project which will use the Calibra wallet.
According to the proposal,
“is intended not only to be fit for purpose for the current financial system but also be able to accommodate future developments and technological advances, such as proposals for global stablecoin eco-systems that have been the subject of significant attention in recent months.”
In the submission, APRA says that virtual wallets are crucial aspects within the financial sector owing to the ever increasing popularity of mobile apps as well as online buying. The regulator says,
“Some, but not all, digital wallets hold stored value on behalf of customers and are pre-paid facilities. Others (such as Apple Pay) hold customers’ credit/debit card details and only facilitate payments from that nominated account.”
The agency explained that it had already started crafting fresh prudential standard that will make it simple to meet the regulatory requirements for fintech startups.
The submission by APRA is a welcome move for Libra as it has faced lots of criticism and regulatory hurdles across the globe since the launch announcement last year. Australia’s central bank, the Reserve Bank of Australia (RBA) had once stated that Libra should never be allowed to roll on unless all the regulatory concerns are addressed and implemented.
Libra has also faced various challenges as it pushes for approval from various jurisdictions across the world. The push for approval in Switzerland seems to have hit a snag after Ueli Maurer, Swiss President, stated that Libra in its current form has failed and approval will not be issued since central banks can’t accept a digital asset pegged on numerous currencies.