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Facebook's Libra Need to Follow APRA's Instructions

Zain Raza by Zain Raza - 07:42 AM Jan 21, 2020
Facebook's Libra Need to Follow APRA's Instructions

Facebook’s nascent crypto project Libra has been in the news for quite for some time now. Its digital wallet Calibra if launched would be required to meet a bare minimum capital requirement and can also face other challenges that come with prudential regulation if Facebook decided to launch it in Australia. The Australian Prudential Regulation said the Council of Financial Regulators have sent various proposals to the government to help them overview the digital wallets and regulate the stored value facilities. Balance and service of $50 million are required to be maintained for safeguarding and minimum capital requirements as well as regular reporting requirements APRA says its highly likely that the proposal would apply to Facebook and it’d also be under the consideration of Australian and Investments Commission too. Facebook wants to convert fiat currency into its own version of cryptocurrency, Libra, and value it against the other currencies of the world. Plans for Facebook’s regulation hit the headlines last June, but this is the first time Australian regulators have put forth its view and spoke in the matter.

Facebook Under The Cosh but Apple Kept Aloof

Another US tech giant, Apple would be cut some slack and is going to be spared from the regulations, like Apple Pay, its digital wallet simply stores a digital version and represent bank-issued cards. Bank deposits are held as payments are done from nominated accounts, which is where the difference lies between Facebook’s Libra and Apple Pay. Under the current evaluation system which is used to regulate purchased payments facilities, Paypal is the only one on the list for now. Paypal is required to hold the value of stored liabilities, greater of 5 per cent or $3 million. It is yet to be categorically decided just how much would be the capital requirements Facebook would need to maintain. Industrial consultation would first be done to draw a definite conclusion and price.

About The Author
Zain Raza

Zain RazaZain is a fervid fan of bitcoin and has been meticulously covering the field for a fair amount of time now. An aficionado of Spider man, Liverpool and Slim Shady.

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