Significantly, the BoE says it needs access to be able to monitor payment chain information as one of its conditions. The FPC is calling on regulators to use “their powers accordingly” in light of the published principles.
The Bank of England has finalized a set of principles the Facebook-led Libra cryptocurrency project must adopt before going live in the UK.
Calling the payment network a potentially “systemically important payment system”, the BoE’s Financial Policy Committee released the October Financial Policy and Summary report this week.
“The FPC judges that such a system would need to meet the highest standards of resilience and be subject to appropriate supervisory oversight”, the committee says in the policy summary.
The Libra Association and corresponding reserve of various fiat currencies underpinning the network are of prime importance, a more detailed document continues. Network participants, exchanges listing the Libra coin, and Libra-compatible wallets will also fall under scrutiny.
The committee states:
“The resilience of the proposed Libra system would rely on the stability of not just the core elements of the Libra Association and Libra Reserve but also the associated critical activities conducted by other firms in the Libra ecosystem such as validators, exchanges or wallet providers. This emphasised the need to ensure end-to-end resilience.”
Similar standards for Libra’s launch were discussed by the EU Commission’s finance minister nominee earlier this week. In his hearing, minister Olaf Scholz said the EU would create a regulatory framework for the payment network under his tenure.
Bank Of China Expands Tests of New Fintech Regulation to Six More Cities
Bank of China launched its first fintech innovation regulatory pilot project in Beijing last year. The bank announced plans to expand its regulatory pilot projects in six more cities and districts on April 27.
The bank plans to conduct pilot projects in Shanghai, Chongqing, Shenzhen, Hebei Xiong’an New District, Hangzhou and Suzhou. Ultimately, it aims to improve the financial services in general for the real economy.
The bank believes fintech innovation projects under regulation will continue to protect consumer’s rights. At the same time, it will also help small and micro private enterprises to go through financing difficulties during the pandemic. In its announcement, the bank said:
“We are aiming to amid the pandemic situation and help enterprises to resume work and production.”
Fintech regulatory is part of the major plan in the development of Chinese fintech sector
The bank released “The Fintech Development Plan (2019-2021)” outline right after the Central Economic Work Conference late last year. It revealed the guidance ideology, basic principles, development targets, key missions and guarantee mechanisms” for fintech work over the course of three years.
According to the outline, strengthening fintech regulation, establishing and improving a basic rules system for regulation is one of the major missions for the bank to achieve in three years, stating that:
“The Plan proposes that by 2021 China establish and improve the “four beams and eight pillars” for China’s fintech development, which includes …Accelerating the drafting of basic regulatory rules, monitoring analysis and assessment work; exploring fintech innovation regulatory mechanisms and comprehensive financial statistics; strengthening the specialisation, unification and comprehensiveness of financial regulation.”
Cointelegraph reached out to the bank for comment on the details of the expanded pilots but received no comment as of press time. This article will be updated pending a response.