The Financial Conduct Authority (FCA) is discussing approving a “small but significant number of firms” using the blockchain technology within the fintech industry in the United Kingdom. UK’s financial watchdog is monitoring projects as part of organization’s “Project Innovate” program.
According to the Financial Times, FCA confirmed there is a number of groups in the preapproval stage that are developing blockchain-based consumer-facing products.
Blockchain, which supports popular digital currency bitcoin, is attractive because of a more open and flexible way of operating compared with traditional banking. Further, it offers the potential of more cost-effective and faster execution of the transactions. However, it alerts some regulators for being vulnerable to fraud or potentially influencing financial stability.
Chris Woolard, the FCA’s director of strategy and competition said in an interview with the Financial Times: “We do think [blockchain] has got some potentially interesting applications and we are talking to firms thinking about how to apply that to financial services and how it could benefit consumers or indeed make the business of compliance easier.- There may be areas where we might want to encourage it a bit.”