Financial regulators in Australia are expected to push Facebook to give out details about its plans for its global cryptocurrency called Libra, following issues that the company had not managed to allay the concerns of the watchdog.
According to the report, eight Australian regulatory bodies had agreed to make use of their formal powers to force Facebook on the company’s plans towards the launch of the digital currency, also claimed by the company to be a stable coin after a reportedly unsatisfactory meeting with company representatives in October.
Stable coins are a type of digital currency which has been joined in value to a stable asset or assets which can range from commodities to real currencies. Libra was set to be associated with government securities and bank deposits involving numerous currencies around the world including the dollar and the Euro.
Regulators, not just from Australia, but around the world have increasingly raised concerns about the new currency, and fears about disruption to the existing financial system. In addition, Libra was also thought to be harmful to Facebook app users, while boosting incidences of money laundering.
Specialist Committee to Look into Libra
The OAIC is the Australian national regulator for privacy and freedom of information. Elizabeth Hampton from the Office of the Australian Information Commissioner (OAIC) stated: “If we don’t get answers to these questions from the U.S.-based team we will then need to consider whether formal powers are exercised where available.”
A specialist committee, which studies the emerging threats for the Australian Securities and Investments Commission had warned that all regulated entities in addition to investors and consumers could be impacted if Libra was not supervised in an effective manner.
The ASIC committee stated: “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.”
A spokesman from Facebook spoke about the issues: “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.”