Business

Ed Drake

3 blockchain firms get green light to join UK FCA’s regulatory sandbox

The U.K.’s financial regulator has approved three blockchain companies for inclusion in the next cohort of its regulatory sandbox, according to an announcement from the watchdog this week.

The Financial Conduct Authority (FCA), which oversees regulation in the U.K., included Diro Labs, Fintech Delivery Panel Partners and ecommerce payment firm Nuggets within the cohort 5 group of companies.

Inclusion in the sandbox enables companies to develop “innovative products, services, business models and delivery mechanisms,” working closely with the regulator to ensure sufficient consumer protections are in place.

The sandbox effectively exempts the companies from a host of compliance requirements in order to foster innovation and development, and inclusion within the program will allow the firms to experiment in a live environment with their respective blockchain technologies.

Diro Labs has been included in the sandbox for their platform, a “central blockchain-based store of information” which validates documents by cross-referencing originals, via blockchain.

According to the FCA, Fintech Delivery Panel Partners was included for work on their “decentralized digital identity platform using machine learning identity verification and blockchain-based key management.”

Ecommerce payments firm Nuggets will develop its system for “storage of personal and payment data securely with blockchain, and the use of this data to access financial services products.”

The FCA reported that some 99 applications had been received for inclusion in the cohort, the highest number of companies applying to date. A further 26 companies were selected for involvement in the program.

According to the regulator, a number of different types of propositions have been accepted, reflecting potential future use cases for the technology. It stated:

“Examples of propositions that have been accepted include digital identity solutions, platforms which tokenize issuance of financial instruments, and services aimed at facilitating greater access to financial services for vulnerable consumers.”

The FCA’s sandbox is mirrored by regulators elsewhere, and is fast becoming a popular choice for policymakers keen to allow breathing space for startup blockchain firms to develop, free from the burdens of overregulation.

A similar scheme has recently been announced by the Reserve Bank of India to greenlight more blockchain initiatives, while South Korea announced the first cohort for inclusion in its sandbox earlier this month.  

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