Blockchain leads the way for new FCA Sandbox start-ups

By Daniel Lanyon on Wednesday 21 June 2017

OpinionAlternative LendingDigital BankingSavings and Investment

The next cohort of firms has been announced by the UK financial regulator, led by those looking to exploit the technology.

The Financial Conduct Authority (the FCA) has unveiled the latest start-ups to make its  regulatory ‘sandbox’. 

The regulatory sandbox allows businesses to test potentially innovative products, services, business models and delivery mechanisms in a live environment while ensuring that consumers are appropriately protected. It is part of Innovate, an initiative kicked off in 2014 to promote competition in the interest of consumers by the UK financial regulator.

The FCA received 77 submissions for the second phase of the regulatory sandbox, more than applied for cohort one. 31 applications met the sandbox eligibility criteria and were accepted to develop towards testing. These include a huge number of blockchain-related firms or those using underlying distributed ledger technology.

A third of the 24 firms who made into the testing stage of the Sandbox's second cohort are selling themselves as utilising the technology. Here’s a handy list and company description:

BlockEx BlockEx wish to test a bond origination, private placement and lifecycle management platform based on distributed ledger technology.

Disberse A blockchain-based service provider that distributes and tracks development and humanitarian finance.

Nivaura Nivaura's focus is on automating the primary issuance and administration of financial assets through a centralised system or a blockchain infrastructure.

Nuggets A consumer blockchain application that gives users a single biometric tool for login, payment and identity verification, without sharing or storing private data.

OKLink A money remittance service combining domestic e-money transfers on OKLink’s cross-border blockchain settlement system.

Oraclize A distributed ledger technology based e-money platform that turns digital identity cards into secure digital wallets through the use of smart contracts and fiat-backed tokens.

Paylinko A DLT-based payments solution enabling users to send and receive payments using a link.

Sabstone A blockchain based platform that aims to help companies receive early payments from their clients against their invoices.

Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said: “The sandbox continues to grow in popularity and it is particularly encouraging that both the number of firms applying and accepted for testing has increased in cohort two. That means more innovative firms, trialling more innovative propositions to bring to the market. This is an important part of the FCA’s commitment to promoting innovation and competition in the markets we regulate.”

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