Australian Financial Regulator could oversee wallets widely used to pay and store significant value like Facebook’s Calibra
The Australian Prudential Regulation Authority (APRA), one of the top regulators watching over the payment systems in the country, said in a submission that it could supervise Facebook’s Libra by playing a part in the proposed framework to govern digital assets.
Today, on Jan 21, APRA submitted the proposal before the Senate Select Committee on Financial and Regulatory Technology. The possible regulatory framework dedicated to Fintech and regulatory technology (RegTech) covering topics ranging from digital wallets to data protection.
According to this proposal, APRA’s role within the framework would be to oversee wallets that are widely used as a means of payment and store significant value for a reasonable amount of time, such as potentially Facebook’s Calibra proposal.
However, that was not all. The submission added that the likes of ApplePay may not follow the same strict regulations as digital wallets using Libra because Apple’s payment system has been operating under infrastructure controlled by banks.
In general, APRA admits that digital wallets are an increasingly important part of the financial system owing to the growing popularity of mobile applications and online purchases. However, it has two distinct types of digital wallets: some (not all) digital wallets hold stored value on behalf of customers and are pre-paid facilities – would be overseen by APRA. Others like Apple Pay hold customers’ credit/debit card details and only facilitate payments from that designated account.
Particularly, the proposed framework is not only intended to be fit for purpose for the current financial system but also be able to accommodate future developments and technological advances. For instance, proposals for global stable coin eco-systems that have been the subject of significant attention in recent months. Therefore, it is imperative that the proposal to oversee digital wallets is permitted by the committee that includes the Reserve Bank, the Australian Securities and Investments Commission (ASIC), and the Federal Treasury.
Moreover, the attached chart is issued with the proposal showing that unlike small transactions such as gift vouchers and pre-paid travel cards subject to minimum regulations, all large deposits like storage of over $50 million value assets (e.g Libra in Calibra wallets) would be overseen by ASIC and APRA. Furthermore, earlier, the Australian central bank had also said that Libra would incur a higher level of scrutiny from Australian financial institutions.
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