Australia drags fintech into regulatory future

The measures being pitched look mostly sensible and flexible, and could be helpful to governments elsewhere

  
The Sydney Opera House is seen as the state of New South Wales continues to report low numbers for new daily cases of the coronavirus disease (COVID-19) in Sydney, Australia, August 16, 2020. Image used for illustrative purpose.

The Sydney Opera House is seen as the state of New South Wales continues to report low numbers for new daily cases of the coronavirus disease (COVID-19) in Sydney, Australia, August 16, 2020. Image used for illustrative purpose.

REUTERS/Loren Elliott

(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

MELBOURNE - Australia has drafted a useful roadmap to bring financial technology regulation into the modern age. The measures being pitched look mostly sensible and flexible, and could be helpful to governments elsewhere.

First, Treasurer Josh Frydenberg wants to expand what constitutes a payments system. That’ll suit a push by Reserve Bank of Australia Governor Phillip Lowe to broaden the definition. Existing rules from the 1990s are too narrow to include buy now, pay later companies such as Afterpay, digital wallets like those operated by Apple, and cryptocurrency assets.

Second, Frydenberg would consolidate the fragmented oversight of payments providers. Combined with some red-tape removal, that should help level the regulatory playing field between incumbent banks and tech upstarts without stifling innovation.

One wrinkle is that he doesn’t seem keen on appointing a payments tsar, a key recommendation in the Farrell Review, one of three investigations he’s leaning on for the changes. With parliamentary legislation needed, however, that may yet change. (By Antony Currie)

(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

(Editing by Jeffrey Goldfarb and Thomas Shum) ((SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS: https://bit.ly/BVsubscribe))


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