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©2019 by Andrea Beatty.

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Paying with e-money stored in your e-wallet


The Australian Prudential Regulation Authority (APRA) has announced that they will ‘potentially’ be overseeing Facebook’s Libra coin as the social media network pushes forward to introduce their new global “digital wallets”.[1] Libra, which is a privately-controlled cryptocurrency, will be able to be spent through Facebook’s own “digital wallet”, Calibra.


APRA is a member of the Council of Financial Regulators (CFR), Australia’s main financial regulatory agency. The council also comprises of other representatives from the Reserve Bank, Australian Securities and Investments Commission (ASIC) and Federal Treasury. CFR have been making recommendations for a new regulatory framework for stored value facilities. The Distributed Ledger Technology Working Group which comprises of CFR and also AUSTRAC is intended at aligning supervision and the regulation of blockchain technology used in finance. This group has examined stablecoins such as Libra and the risks and supervisory considerations concerned with the creation of them. The G7 working group has previously noted that as stablecoins are cryptocurrencies backed by financial assets, they could ensure the global payment system is ‘faster, cheaper and more inclusive’.[2]


APRA identified in their submission to the Senate Select Committee on Financial Technology and Regulatory Technology proposed that their new framework is not only meant to be “fit for purpose” for the status quo but is also intended to accommodate any future developments within the technological sphere.[3] Future advances include proposals for global stable eco-systems which have recently gained attention. Under this proposed framework, APRA would be required to oversee wallets widely used as means of payment and store significant value for reasonable amounts of time. It is likely that Libra will be properly regulated like other fintech companies such as PayPal. However simpler products such as gift vouchers and pre-paid travel cards face limited regulation. APRA does not expect to oversee digital wallets which are designed to allow payments pass through such as Apple Pay.[4] These kinds of digital wallets such as Apple Pay are instead regulated by ASIC. For large “deposit-like” products that have more than $50 million in stored value including Calibra, they both fall under ASIC and APRA’s regulations.[5] However, these are subject to rules regarding minimum capital and other requirements such as risk management, governance and technology.


The plan for ASIC and APRA is to oversee Calibra which underscores high levels of scrutiny regarding Facebook’s cryptocurrency push that they will receive from financial authorities. The RBA has identified that cryptocurrency should not be allowed to launch until all regulatory requirements are met.


There is scepticism regarding how many Australian consumers will want to make transactions utilising Libra. This was echoed by the RBA who identified that it is unclear whether there will be a great demand for global stablecoins as Australian consumers are already served well through existing banking infrastructure. However, RBA identified that while Australians may not have been well served by banks in FOREX, the growth of low-cost fintech FOREX firms are now offering cheaper and faster services.[6]


If you work with cryptocurrency and wonder if APRA’s proposed framework will impact the operation of your business, Piper Alderman’s Fintech and Blockchain team may be able to advise you on any potential licencing requirements or other implications for your business.




[1] APRA, Senate Select Committee on Financial Technology and Regulatory Technology Submission, https://www.apra.gov.au/sites/default/files/2020-01/Senate%20Select%20Committee%20on%20Financial%20Technology%20and%20Regulatory%20Technology.pdf.


[2] Clancy Yeates, ‘APRA could oversee Facebook’s controversial cryptocurrency play Libra’, Sydney Morning Herald, https://www.smh.com.au/business/banking-and-finance/apra-could-oversee-facebook-s-controversial-cryptocurrency-play-libra-20200121-p53tbb.html.


[3] APRA, Senate Select Committee on Financial Technology and Regulatory Technology Submission, https://www.apra.gov.au/sites/default/files/2020-01/Senate%20Select%20Committee%20on%20Financial%20Technology%20and%20Regulatory%20Technology.pdf.


[4] Ibid.


[5] Ibid.


[6] RBA, Submission to the Senate Select Committee on Financial Technology and Regulatory Technology, https://www.rba.gov.au/publications/submissions/payments-system/financial-and-regulatory-technology/pdf/financial-and-regulatory-technology.pdf.

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