UK Finance Watchdog: No Need to Rewrite Rules for DLT

A top UK finance watchdog said today that it has no immediate plans to alter its regulatory approach in light of blockchain adoption.

By way of a new discussion paper, the Financial Conduct Authority (FCA) is seeking comments from industry stakeholders and observers in order to "explore where the balance of risk and opportunities may lie in relation to [distributed ledger technology]".

The agency – which operates a so-called regulatory “sandbox” that includes a number of companies working with the tech – said in the paper:

"At this stage we do not see a clear need to consider changes to our regulatory framework for DLT solutions to be implemented. Instead we want to explore emerging business models, and how their potential risks and opportunities operate in the context of our regulatory framework."

Elsewhere in the paper, the FCA said that it wanted to adopt a "neutral" stance in regards to the technology, looking to police the companies that utilize it instead. Early last year, an FCA official said that the agency wanted to give the ecosystem of developers and companies working with blockchain "space," citing the early stages of development.

That said, it’s not out of the question that the FCA could look to rework is approach to regulating the market in light of future potential adoption. This work, too, could be impacted by international regulatory work being conducted between the FCA and other organizations of its kind.

The full discussion paper can be found below:

Discussion Paper on distributed ledger technology by CoinDesk on Scribd

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