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UK will test blockchain technology in traditional market activities

The UK Finance Ministry has announced on Tuesday that it will begin live testing of blockchain technology in traditional market activities such as settlement and trading stocks and bonds. Gwyneth Nurse, director-general of the ministry for financial services said that distributed ledger technology (DLT), enabling crypto assets, was a priority to make finance market infrastructure more efficient and innovative. Nurse stated that a UK financial market infrastructure « sandbox » will be created next year to allow regulators to evaluate DLT projects.

This is an example of the UK’s innovative regulators, who have been instrumental in nurturing fintech companies. Trading, clearing, and settlement are the three main activities involved in stock, bond, and other financial assets that are traded on the international financial market. DLT may change all this. Financial assets could be created in hours, rather than weeks or days. The government might also be interested in testing how settlement and trading could be combined.

Nurse spoke at the IDX derivatives conference, London. She said that a sandbox would allow for testing new regulations and permanent modifications to make market users more profitable. Nurse stated that the Bank of England and the Finance Ministry will collaborate to assess a digital currency. A second consultation is planned for later in 2018. Nurse noted that if a central bank approves a digital currency, the digital pound will not become available until the second decade. The FCA also stated that marketing crypto assets must adhere to the Advertising Standards Authority’s guidelines and declare that they don’t regulate them.\[…]