The UK’s Financial Conduct Authority (FCA) has signalled it is talking to a number of firms working on blockchain technology and how it will be applied to the financial services.
An interview with FCA director of strategy, Chris Woolard, in the Financial Times said: “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.”
He revealed a small number of companies working on blockchain solutions for finance are being scrutinised as part of the regulator’s specialist FinTech regulatory sandbox called Project Innovate.
The FCA intends to announce further details of the firms it is working with and its findings regarding the use of blockchain in financial services.
While many have hailed blockchain, or distributed ledger technology, as a crucial solution to many industry problems that could significantly cut costs, almost no solutions are currently being deployed in the real world.
Regulators have also raised concerns that rapid uptake of the technology without understanding its risks and limitations could be a recipe for disaster.
The FCA said several companies in its pre-approval stage are working on applications of blockchain for both consumer facing and compliance products. However, blockchain could also prove significant in clearing and settlement operations.