Despite an attempt to settle the nerves of regulators around its plans for the cryptocurrency, the Libra Association may now have to submit further details about how the asset will operate before Australian regulators will permit a rollout in the country.
Following a meeting with the company in October that regulators described as “unsatisfactory,” the next step could see the Australian regulator use its formal powers to compel Libra to submit information before deciding whether to greenlight the project.
In particular, the Australian authorities are concerned about the potential for consumer harm, disruption to the financial system and money laundering risks arising from the cryptocurrency—concerns shared with their counterparts elsewhere in the world.
Libra was flagged by a committee of the Australian Securities and Investments Commission (ASIC) tasked with identifying emerging threats to regulation of the financial system. According to their findings, “all regulated entities” could be at risk from the launch of Libra in Australia.
The proposed Libra ecosystem also poses many risks and threats, including the proliferation of scams based on Libra via mobile apps. We also expect that we may identify more risks and threats once we have more information.
Responding to the matter, a spokesperson for Facebook told the news outlet the firm would maintain dialogue with regulators overseeing the project: “As a member of the Libra Association, we will continue to be a part of dialogue to ensure that this global financial infrastructure is governed in a way that is reflective of the people it serves.”
Facebook’s plans for the launch of its Libra stablecoin are by its own reckoning ambitious, made all the more difficult by the reaction of regulators worldwide.
The firm has said the Libra Association intends to take a state-by-state approach to working with regulators, in order to clear the compliance hurdles to its launch.
However, with Australia only the latest international regulator to voice serious concerns, the news comes as yet another setback to the social giant’s plans.
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