Government doubles down on fintech as Chancellor announces new fintech-friendly outlook 

By Aisling Finn on Monday 19 April 2021

Digital Banking

The Chancellor also announced it would be adopting several other recommendations laid out in both the Kalifa and Hill reviews.

Government doubles down on fintech as Chancellor announces new fintech-friendly outlook 
Image source: Rishi Sunak/HM Treasury

Rishi Sunak is shaping up to be one of the most fintech-friendly government ministers ever.

The Chancellor of the Exchequer has made good on his promises to the fintech industry, today announcing that he is set to implement some of the suggestions laid out in the Kalifa Review.

In the review, which was published at the end of February this year, Kalifa suggested several measures, several of which Sunak has today put into motion.

Speaking of the new plans, Chancellor of the Exchequer, Rishi Sunak said: “Our vision is for a more open, greener, and more technologically advanced financial services sector. The UK is already known for being at the forefront of innovation, but we need to go further.”

“The steps I’ve outlined today, to boost growing fintechs, push the boundaries of digital finance and make our financial markets more efficient, will propel us forward. And if we can capture the extraordinary potential of technology, we’ll cement the UK’s position as the world’s pre-eminent financial centre.”

As part of the plans laid out this morning, the Financial Conduct Authority (FCA) will create a regulatory scale box, to help fintechs to scale and grow in a more sheltered environment.

The FCA will also enter into the second phase of its digital sandbox, which helps firms to test concepts of sustainability and help tackle climate change-related issues.

Another proposed sandbox, the government will support the creation of a distributed ledger (DLT) sandbox for firms exploring how to improve our current financial infrastructure.

Sunak will create a new task force, jointly led by the Bank of England and HM Treasury, to explore the possibility of a central bank digital currency (CBDC).

Alongside the task force, the Chancellor will also create an industry-led Centre for Finance, Innovation and Technology (CFIT), which will be committed to helping regional fintech hubs prosper.

The Bank of England will also introduce a new ‘omnibus’ account to offer 24-hour wholesale payment and settlement for financial infrastructure providers, making payments faster and cheaper. 

Sunak also confirmed that the government will be adopting all recommendations laid out in the Hill Review, a review into the UK’s listing rules.

The Hill Review laid out plans to bring the London Stock Exchange more in line with its US rivals, the New York Stock Exchange and the NASDAQ.

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