Australia has a plan for tackling stable coins like Libra.
Are Libra and Australia At It Again?
Stable coin regulation will now be in the hands of Australia’s Prudential Regulatory Authority (APRA). As part of the Australian Council of Financial Regulators, the APRA has created what’s known as the Distributed Ledger Technology Working Group as a way of governing new operations and maneuvers in the industry of decentralized finance.
One of the most controversial steps taken in recent years in the world of digital money involves the establishment of stable currencies. These coins are very much like bitcoin (BTC) and Ethereum (ETH) in that they are digital and are built atop blockchain technology.
However, where they’re extremely different is that they’re allegedly tied to fiat currencies, like the U.S. dollar, the euro, the yen and the yuan. This is done to ensure that their prices remain “stable,” hence their names. They are less prone to volatility and price swings, and thus investors can access the world of digital finance without having to experience a lot of the risks that come with more mainstream virtual coins like bitcoin cash (BCH) and Litecoin (LTC).
Sometimes, the notions of stable currencies are viewed through very positive eyes. One of the top-performing examples of a stable coin is Coinbase’s USD Coin (USDC). At other times, the move can lead to trouble and questions from a doubting public, as in the case of Tether (USDT) given its ties to Bittrex, a popular cryptocurrency trading platform.
A new report issued by the APRA says that regulators with the organization will now be put in charge of monitoring stable currencies and other related blockchain projects and digital wallets. This means the governance of any and all Libra-based activities in Australia will likely fall into the hands of the APRA.
The report explains:
It is aimed at aligning supervision and regulation of blockchain technology used in finance. For example, this group has examined supervisory considerations and risks associated with the creation of the Libra platform and other stable coins.
Australia and Libra have never quite gotten along. The country announced that the stable coin project – first introduced in June of 2019 – failed to follow all appropriate protocols and that regulators were looking to grill executives even harder for information so they could learn more about what the coin is aiming to do and what it’s properties are.
A Few Problems for the Stable Coin
Regulators have also issued threatening verbiage that if Libra doesn’t cooperate and hand over the answers they’re looking for, they’ll have to turn elsewhere.
Libra made headlines late last week when the Association behind it lost another major member in Vodafone, a prepaid international phone service. Thus far, the Association has lost several partners including PayPal, Visa and Mastercard.
