Blockchain, Crypto Firms Selected For Fourth Phase Of UK FCA’s Regulatory Sandbox

Announcements, Blockchain | July 4, 2018 By:

The UK Financial Conduct Authority (FCA) has announced the 29 firms that were successful in their applications to begin testing in the fourth cohort of the sandbox.

The FCA sandbox, first opened for application in June 2016, allows businesses to test innovative products, services or business models in a live market environment, while ensuring that appropriate protections are in place. The sandbox is part of the FCA’s Project Innovate, which aims to boost competition and growth in financial services.

The FCA received 69 applications to cohort four, an increase on the previous year. 29 firms, representing a range of sectors, locations and size, met the eligibility criteria and were accepted to develop towards testing. Over 40% of companies accepted to cohort four are using blockchain technology, with six firms using the technology to automate the issuance of debt or equity. Two are using blockchain to support the provision of insurance.

The UK finance regulator also accepted a small number of firms that will be testing propositions relating to cryptoassets. The authority explained that it wants to “explore whether, in a controlled environment, consumer benefits can be delivered while effectively managing the associated risks.”

The blockchain and crypto firms selected for the fourth cohort include BlockEX, Capexmove, Etherisc, Fineqia, Fractal, Globacap, Natwest, Token Market, Tokencard, Universal Tokens, World Reserve Trust, 20|30. Tests will be conducted on a short-term and small-scale basis, according to the FCA.

“I am pleased to say that this is the largest sandbox cohort to date with a record number of applicants meeting our eligibility criteria,” said Christopher Woolard, executive director of Strategy and Competition at the FCA. “Cohort 4 has seen a large increase in the number of firms testing wholesale propositions including firms that are aiming to increase the efficiency of the capital-raising process. Alongside these we can see significant use of distributed ledger technology (DLT), some experimentation with cryptoassets which will help inform our policy work and propositions aimed at helping lower income consumers.”