Blockchain Startups Among Companies Approved by UK FCA for Regulatory Sandbox

The group of companies included in the fourth round of the U.K. regulatory sandbox has been revealed. The cohort includes 29 companies, 40 percent of which are involved in testing blockchain and digital ledger technology solutions, Cointelegraph reported.

The unveiling was announced on July 3 by the U.K. Financial Conduct Authority (FCA), the country’s financial regulatory body. Companies that have been green-lighted by the agency will be able to test their operations in a live market environment.

This sort of ecosystem provides protection to consumers while removing restrictive regulations for startups. It’s part of the 2014 Innovate initiative geared towards the cultivation of competition among companies that wish to enter the market.

“We have accepted a small number of firms that will be testing propositions relating to crypto assets. We are keen to explore whether, in a controlled environment, consumer benefits can be delivered while effectively managing the associated risks,” the FCA said.

Since launching Innovate, the initiative has received over 1,200 applications and supported more than 500 companies. The fourth round of the U.K. regulatory sandbox saw 69 companies wanting to participate, of which 29 have received confirmation to begin testing their platform.

Six of the 29 approved will evaluate distributed ledger technologies' (DLT) efficiency in automating the issuance of debt and equity, and two are utilizing the provision of insurance. The rest are looking into incorporating DLT into geo-location technology, Application Programming Interfaces (API), and artificial intelligence (AI).

One of the companies that have been approved is 20|30, a company that uses the Ethereum blockchain to allow primary issuance of equity tokens. The startup’s founder is ecstatic that they were included in the fourth cohort of the FCA sandbox, saying this approval is a milestone for the 20|30 team.

“For the first time, our integration with the Turquoise platform will demonstrate a regulatory-compliant way for institutional investors to purchase equity tokens,” 20|30 co-founder David Siegel said. “We believe this is an important first step to building a new digital foundation for capital markets.”

The FCA revealed that there are also a few crypto asset-related companies that have been included in the U.K. regulatory sandbox. These companies are reportedly set to evaluate their platform if it can provide valuable service to consumers while effectively handling the risks associated with such venture.