Blockchain

Blockchain progresses with UK regulator

Brian Cantwell examines the continuing EU central bank funding for UK leasing and the path ahead

In April 2017 the Financial Conduct Authority sought views on the potential for future development of blockchain in the markets the FCA regulates. 

The FCA received 47 responses from regulated firms, national and international trade associations, technology providers, law firms and consultancies.

The industry expressed particular support for;

• The FCA maintaining a ‘technology-neutral’ approach to regulation.
• The FCA’s ‘sandbox’ where firms got to develop their business ideas for blockchain in cooperation with the regulator. 
• The current FCA rules, which were deemed flexible enough to accommodate the use of DLT by regulated firms and no changes to specific rules, were proposed.

Many firms told the FCA that blockchain tech could help to organise regulatory requirements for businesses which could reduce costs on both sides.

But ‘permission-less’ networks, which allow anyone to view transactions online, and their compatibility with regulation were called into question. It was suggested that permissioned networks should feature a ‘gatekeeper’ who controls access to engage successfully with blockchain and regulation.

The FCA said it would consider all forms of blockchain, including permissioned and permission-less DLT networks, and that it would continue to review the regulation in the sector.