Mr. Philip Lowe, the Governor of the Reserve Bank Of Australia, gave a speech to the Australian Payments Network on the 7th of December.
During his address, the Governor of the RBA spoke about Australia’s leading role in the global financial domain, about what may be on the horizon, and what may change.
Digital Wallets And Who’s Behind Them
In the push for innovation, Mr. Lowe stated that one of the main factors to consider is the continuous rise of digital wallets. He then went on to outline the major differences between Google Pay and Apple Pay – and the regulatory issues faced by them, such as Apple possibly being forced to give third-party apps access to its NFC technology.
After mentioning Ant Group and Tencent, the owners of Alipay and WeChat Pay, Mr. Lowe weighed in on Facebook’s project Libra – now rebranded as Diem and facing lawsuits over it.
After applying for a license from FINMA (the financial regulator of Switzerland), the project faced a sizable backlash from regulatory entities across Europe – especially from the French and German finance ministers.
As a result, FINMA set up a regulatory college in order to coordinate with other countries.
The RBA is a part of the regulatory college – on behalf of Australia’s Council of Financial Regulators. According to Mr. Lowe, FINMA has made it clear that Libra/Diem will have to comply with stringent regulations, given the scope of the project.
“This initiative has raised concerns from governments and regulators in many jurisdictions regarding a wide range of issues including consumer protection, financial stability, money laundering, and privacy. […]
FINMA has indicated that Diem will be subject to the principle of ‘same risks, same rules’ – that is, if Diem poses bank-like risks it will be subject to bank-like regulatory requirements. It remains to be seen how this and other similar initiatives progress.”
Opinions are divided on the possible success of Facebook’s cryptocurrency when it launches – but it seems the Diem Association will be off to a rough start.
