40% of UK’s Latest Regulatory Sandbox Companies Blockchain, Crypto Related

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40% of UK's Latest Regulatory Sandbox Companies Blockchain, Crypto Related

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Out of the 29 firms released by the UK Financial Conduct Authority (FCA) this week to the fourth cohort of the regulatory sandbox, ten are blockchain and crypto asset firms, according to the EconoTimes.

The FCA’s regulatory sandbox was created so that prospective companies would be able to test innovations and services in a live, protected, business market. The current round is the fourth since the project was announced in 2016.

As this latest round illustrates, 40% of the fourth round companies accepted are distributed ledger technology (DLT) or blockchain-based startups. Also, the regulator has accepted a small number of crypto-assets related firms as the FCA suggested that they are “keen to explore whether, in a controlled environment, consumer benefits can be delivered while effectively managing the associated risks.”

Christopher Woolward, executive director of Strategy and Competition at the FCA, explained further why it saw fit to include crypto-assets firms in this year’s fourth round:

“…we can see significant use of distributed ledger technology (DLT), some experimentation with crypto assets which will help inform our policy work and propositions aimed at helping lower-income consumers.”

The DLT and crypto assets-focused startups selected for the fourth cohort include BlockEX, Capexmove, Etherisc, Fineqia, Fractal, Globacap, Natwest, Token Market, Tokencard, Universal Tokens, World Reserve Trust, 20|30.

Due to the enormous growth in interest in new crypto assets like Bitcoin, the UK government created a Cryptoassets Taskforce earlier this year, consisting of the Treasury, Bank of England and Financial Conduct Authority.

The FCA does not regulate cryptocurrency exchanges, brokers or businesses, which gives them a gray area status and some freedoms. However, it has been pushed by the British Cryptocurrency Trade Association, the UK’s first self-regulatory blockchain industry trade body, to begin regulating the industry.

The United Kingdom was ranked fourth out of 48 other “crypto-friendly” nations, according to a study made by Blockshow Europe this year in which the UK had been praised for its “importance as a European hub for cryptocurrencies”.

 

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