“New form of money as much as possible, CBDC [central bank digital currencies]Digital currencies / stablecoins and crypto assets could significantly reshape the financial system, “Bailes said at a luncheon at the Australian Chamber of Commerce (AmCham) in Sydney on Thursday. I did.
“The move to a more digital and decentralized financial system can bring key benefits: faster and more efficient payments, lower business costs, job creation and economic growth. It also comes with risks, given that if not managed carefully, the financial system can become unstable and tend to harm the community. “
To regulate carbon issues, APRA is improving climate risk management capabilities for board and management, proactively addressing identified risks, while enabling institutions to take advantage of new opportunities from energy transitions. ..
APRA will not be “left behind” in crypto
With Summit hearings about crypto fraud and fraudAnd in the turmoil over issues such as tax and crypto valuation methods, Mr. Byres acknowledged “significant uncertainty” in this area, and APRA said “pretending to be the answer and not claiming first.” I did.
The speech will be given when ANZ Bank and Commonwealth Bank are talking to APRA and other regulatory agencies about their respective crypto projects.
ANZ announced Stablecoin, A $ DC last month, AUD cash on a one-to-one basis, enabling institutional investors to transfer funds to crypto platforms cheaper and more securely. CBA is conducting a pilot project to direct retail customers to various crypto coins through US exchanges and custodians.
The Financial review CBA products reported Thursday face regulatory lag Because ASICs are using their new design and distribution capabilities.
Mr. Byres did not comment on a particular banking project.
In his speech on “Regulating the Technological Revolution in Finance,” he stated the philosophy that APRA “needs to be well-paced, monitor front runner tactics, and not be left behind.” rice field. But likewise, don’t put forward how you need to run the race. “
APRA’s cryptocurrency letter is similar to the one addressed to the CEO of a UK bank two weeks ago by the UK’s Prudential Regulation Authority, which is part of the Bank of England.
The letter said that the crypto market is “a market that has a limited history, has a different risk profile, can be characterized by very high volatility, and can be significantly different from other markets in which the company participates. It has a structure with the participants. “
Byres said APRA’s focus includes focusing not only on harm prevention but also on consumer interests.
“How money changes, and how the financial system changes with it, is basically where money users trust,” he said.
Balance between safety and competition
While the CBDC and Stablecoin were “using reliable systems to take advantage of new technologies,” support for other types of crypto assets is often distrust of these same systems, as well as distrust of these same systems. A system that has nothing to do with current institutions or traditional currencies, admitting that it is based on the preference to put trust in decentralized and unlicensed ones. “
APRA seeks a balance between safety and competition and does not try to evaluate the winner. He said that regulations are often surrounded by negatives, but “it provides customers with a sign of approval that reassures them that their company or product is credible and opens up new markets and services in the face of information asymmetry. It can be prosperous. “
“This can also be the foundation of innovation. The establishment of consumer data rights and open banking in Australia is a clear example. Don’t allow aversion to regulations that miss these benefits. Hmm.”
The speech emphasized APRA’s willingness to support new ways of banking. APRA is initially a safety regulator, but “but that doesn’t limit changes for the purpose of maintaining the status quo,” Byres said.
“Neither does it mean protecting existing financial institutions when a better, safer and more efficient way to do business emerges. Technology is actually better, safer and better. If we can provide an efficient financial system, our job is to embrace change for the benefit of the Australian community. “
One of the changes APRA is monitoring is the use of digital wallets to manage money outside of regulated bank deposit systems. As a high-priority issue, we are developing a new framework for “prepaid cards,” which are digital wallets provided by non-banks.
“These products have many of the same features as traditional bank deposits, but at this point they don’t have the same consumer protection,” said Bailes. “Given that it is difficult for consumers to understand and compare their risks, the competition is not equal.”
The UK PRA wrote in a March 24 letter to British banks that the underlying technologies behind crypto assets were “reducing transaction costs, improving payment system interoperability, and expanding user choices. Through such measures, it has the potential to improve the efficiency and resilience of the financial system in the long run. ” “.
However, “these benefits can only be realized with an effective public policy framework that is safe to implement, mitigate risk, and maintain broader trust and integrity in the financial system, and innovation is sustainable. is”.
The Bank of England emphasized the risks associated with financial crime and custody. “Many of these markets are new and untested,” he said. “They have a limited history, different risk profiles, can be characterized by very high volatility, and structures that can be significantly different from other markets in which market participants and companies participate. I’m waiting.”
“Companies need to consider whether these market characteristics are well integrated into the risk management framework,” PRA said.