Stablecoin platform and Australian Regulator
2022.12.08 05:01
Stablecoin platform and Australian Regulator
Budrigannews.com – The regulatory framework for stored-value facilities in Australia is “working on options” for incorporating payment stablecoins. This inclusion would be part of broader changes to the country’s payments regulatory framework.
A report on stablecoins assessing their recent developments, risks, and regulatory prospects was posted on the Reserve Bank of Australia’s official website on December 8. The report acknowledges that “stablecoins have the potential to enhance the efficiency and functionality of a range of payment and other financial services” despite the fact that risks are given a lot of attention.
The report says that Australian regulators are “doing a lot of work” to figure out how to integrate stablecoins into the country’s payment system without putting it at too much risk. Impacts on energy and climate, disruptions to funding markets, rising bank exposure, and liquidity risks are among these risks, according to the authors.
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The authors cited the Terra collapse as an example of the particular fragility of algorithmic stablecoins, whose stability is dependent on investors’ confidence in the value of an unbacked crypto-asset.
“given the potential for these arrangements to become widely used as a means of payment and a store of value,” the report says, “reiterates the CFR’s priority in the near term for the development of a framework for payment stablecoins.”
A draft of the bill known as the Digital Assets (Market Regulation) Bill was made available by local Senator Andrew Bragg in September. Licenses for stablecoin issuers, digital asset custody services, and digital asset exchanges are proposed in the document.
More than 140 use case proposals from the financial sector have been submitted to the Reserve Bank of Australia’s central bank digital currency (CBDC) pilot program, according to Assistant Governor Brad Jones. The central banker, on the other hand, warns that this interest in CBDC could cause the Australian dollar to fall and lead people to avoid commercial banks entirely.
