UK Watchdog Allows Three Blockchain Firms to Join Regulatory Sandbox

The United Kingdom’s Financial Conduct Authority (FCA) has allowed three blockchain-based businesses to join the latest cohort of its regulatory sandbox, the organization announced on April 29.

Diro Labs is one of the blockchain-driven companies accepted by the FCA for performing tests on a “short-term and small-scale basis.” According to the regulator, the startup uses a “central blockchain-based store of information” to verify identities and documents online from original sources.

Meanwhile, Fintech Delivery Panel Partners has been given permission to test a “decentralized digital identity platform using machine learning identity verification and blockchain-based key management.”

Finally, e-commerce payments and verified digital identity platform Nuggets intends to test the “storage of personal and payment data securely with blockchain, and the use of this data to access financial services products.”

The regulator said it received a record number of 99 applications to join the fifth cohort of its sandbox from firms operating both in the U.K. and overseas. It explained:

“Examples of propositions that have been accepted include digital identity solutions, platforms which tokenize issuance of financial instruments, and services aimed at facilitating greater access to financial services for vulnerable consumers.”

According to the FCA, regulatory sandboxes enable companies “to test innovative propositions in the market with real consumers.”

Such schemes have become popular with regulators around the world, with the Reserve Bank of India recently announcing it will also allow blockchain innovations to be tested in this way.