Reserve Bank of Australia watchful of Facebook’s cryptocurrency launch plans

The Reserve Bank of Australia’s (RBA) Payments System Board discussed Facebook’s cryptocurrency launch plans during its recent meeting.

In an update posted on the RBA website, the board discussed a number of issues including the New Payments Platform (NPP), developments in the ATM industry and digital identity, migration to ISO 20022, as well as crypto assets, among others.

The board particularly deliberated over Facebook’s cryptocurrency ‘Libra’ announced in June and its subsidiary ‘Calibra’ that will provide digital wallet services.

“The Board discussed the announcement by Facebook of the proposed introduction of a ‘global cryptocurrency’ as well as a new Facebook subsidiary to provide digital wallet services. Bank staff will continue to coordinate with relevant domestic and overseas regulators, to ensure that any payments system implications are appropriately addressed before any launch,” the post reads.

In a Q&A session in June, as reported by Bloomberg, Governor Philip Lowe had said that the Libra project could be far from becoming a reality.

“There’s a lot of water under the bridge before Facebook’s proposal becomes something we’re using all the time,” he said. “There are a lot of regulatory issues that need to be addressed and they’ve got to make sure there’s a solid business case, so we’ve got to be careful before we jump to conclusions.”

Lowe, in fact, is quite skeptical of cryptocurrency’s mainstream adoption in general. He believes that cryptocurrencies are unlikely to take off in Australia as the country already has “an efficient electronic payments system that allows anyone of us to make bank payments to another person in five seconds just knowing their mobile phone number.”

Similar views were echoed by payment policy department analysts Cameron Dark, David Emery, June Ma and Clare Noone in a research paper published in June. They said that there is “little likelihood of a material take-up of cryptocurrencies for retail payments in Australia in the foreseeable future.”

The authors also noted that the use of stablecoins as a payment method has been very limited, as has the supply of Australian dollar-linked stablecoins.

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Earlier this month, the Australian Information and Privacy Commissioner Angelene Falk joined other international data protection and privacy enforcement authorities to seek more clarity from Facebook on its crypto project.

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