U.K.’s Financial Conduct Authority (FCA) is fast-tracking the development of a digital sandbox and plans to launch a pilot soon. The FCA is seeking to facilitate innovation from firms that are developing digital solutions for the COVID-19 pandemic.
The regulator has been working on the digital sandbox for some time now, but the pandemic has prompted it to accelerate its efforts. The sandbox will allow innovative firms to test and develop proofs of concept in a digital testing environment, the FCA stated in a press release. It will also bring together these firms, enabling greater collaboration to solve challenges posed by the coronavirus pandemic.
One of the most critical functions of the sandbox will be giving the participants access to data. With data being pivotal in how firms serve their clients, “long-standing challenges like data access and standardisation are increasingly a barrier for market participants and innovators.” The sandbox will give the firms access to synthetic and anonymized data sets, allowing them to test and validate their technology solutions.
The sandbox will also allow the regulator to identify areas where regulations could play a big role and foster innovation. Authorities and other interested parties will get the chance to observe ‘in-flight testing at a technical level’, all while giving the firms an API vendor marketplace to foster interoperability.
Applications haven’t opened yet, but the FCA is accepting expressions of interest from both the regulated and unregulated entities.
While the regulator hasn’t mentioned the technologies that it will seek to promote in the sandbox, blockchain will certainly be among them, especially as a response to the COVID-19 pandemic. Several countries are already relying on blockchain technology to fight the pandemic, including China, where the pandemic began. In the U.S., Congress is looking at using blockchain in distribution of personal protection equipment and other medical necessities.
The application of blockchain to fight the pandemic was further backed by the World Economic Forum recently. While launching its blockchain deployment kit, the WEF stated that the need for blockchain has been made more urgent by the pandemic as it has underscored the need for resilient global supply chains.
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