FCA welcomes firms working on crypto-assets to latest sandbox cohort

FCA welcomes firms working on crypto-assets to latest sandbox cohort

The Financial Conduct Authority's regulatory sandbox continues to gather momentum, with 29 firms - including some working with crypto-assets - getting the go-ahead to join the initiative's fourth cohort.

The FCA received 69 applications to cohort four, an increase on the previous year, with the 29 successful firms representing a range of sectors, locations and size.

More than a quarter - eight firms - are operating in the wholesale sector, while five large firms - including Natwest - are involved.

Over 40% of companies accepted to cohort four are using distributed ledger technology, with six firms using it to automate the issuance of debt or equity. Geo-location technology, APIs and AI are also being tested.

Meanwhile, "a small number of firms" will be testing propositions relating to crypto-assets, with the FCA saying that it wants to "explore whether, in a controlled environment, consumer benefits can be delivered while effectively managing the associated risks".

Since launching the world's first domestic regulatory sandbox in 2016, the FCA has been copied by watchdogs around the world, from Singapore, to South Africa to Saudi Arabia.

The concept has proved so popular that the UK regulator is now leading efforts to create a global sandbox, enabling fintech firms to carry out tests in different countries at the same time and helping watchdogs to identify and solve common cross-border problems.

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