UK Financial Watchdog Looking to Approve Blockchain Technology
A recent article by the Financial Times has brought to light information that the UK’s Finanial Conduct Authority is in the process of considering a number of firms that use blockchain technology for approval. The FCA has several groups at a pre-approval stage which are developing blockchain-based products. This move would give the companies the ability to legally start lending or undertake payment services in the UK
Speaking to the Financial Times, Chris Woolard, the FCA’s director of strategy and competition, said: “We do think [blockchain] has got some potentially interesting applications and we are talking to firms thinking about how to apply that to financial services and how it could benefit consumers or indeed make the business of compliance easier. There may be areas where we might want to encourage it a bit.”
The companies are being scrutinised as part of the FCA’s ‘Project Innovate’ which offers advice to companies, both start-ups and incumbents, who are trying to develop innovative products on what regulations pertain to them. The project includes a regulatory sandbox, where companies can test products with temporary FCA authorisation.
Jeremy Millar, founder of blockchain advisory firm Ledger Partners, remarked: “Reports have claimed up to $100bn could be saved on the post-trade settlement process by using blockchain. Another estimate by Goldman Sachs said there could be $50bn of savings in the US repo market alone. The numbers are huge,”
The UK government is considered to be very forward-thinking when it comes to blockchain technology and financial technology, promoting distributed ledgers and carrying out trials of their use in government services.