The UK’s financial regulator, the Financial Conduct Authority (FCA), has announced the second cohort of its fintech sandbox on June 15. Out of the 24 startups joining this year’s cohort, nine are developing solutions using blockchain technology, which is a testament to the potential that the FCA sees for this new technology to play a major role in the financial services sector of the future.
The FCA’s fintech sandbox allows startups to trial new financial products and services without “incurring the normal regulatory consequences.” The idea behind the fintech sandbox is to boost technological innovation as well as competition in the UK’s financial industry.
The FCA’s Executive Director of Strategy and Competition, Christopher Woolard, stated that the fintech sandbox is growing in popularity as more firms applied for this year’s cohort than for the one in the previous year.
“It is particularly encouraging that both the number of firms applying and accepted for testing has increased in cohort two. That means more innovative firms, trialing more innovative propositions to bring to the market. This is an important part of the FCA’s commitment to promoting innovation and competition in the markets we regulate,” Woolard stated.
77 submissions were received for this year’s cohort of which 31 applicants met the eligibility requirements. Out of the 31 eligible fintech startups, the 24 chosen ones were accepted into the fintech sandbox as they are ready for testing. Now that the second cohort has been finalized, the startups will start testing their new products and services shortly on a small-scale and short-term basis to safeguard consumers while still having enough leeway for innovation to thrive.
The selection of startups is very diverse. The sectors covered by the participating fintech startups include insurance, payments, retail banking, and lending, among others, while new technologies involved include artificial
An increasing number of central banks and governments are working on digitizing their national currencies. China and Russia are investigating the potential of Ethereum as the base protocol for a digital Yuan and Ruble respectively.
Currently, the Royal Chinese Mint, the subordinate unit of China Banknote Printing and Minting, is testing Ethereum and its ERC 20 token standard to digitize the renminbi (RMB) or the Chinese yuan. As ConsenSys’ head of global business development Andrew Keys revealed in his blog post, the Royal Chinese Mint is at the forefront of research and exploration into digital money.
By utilizing the ERC 20 token standard, the Royal Chinese Mint is essentially considering the possibility of releasing unique tokens that are compatible with the Ethereum network; an Ethereum-compatible token would grant higher liquidity and interoperability.
The Royal Chinese Mint is currently “concentrating on the research and exploration of the forefront of digital money, taking part widely in innovation and practice in the fields such as digital currency, mobile finance, smart-city construction and Internet-based finance; it also actively promotes the application of blockchain technology in finance and related fields,” wrote Keys.
Apart from the Chinese government, Russia is also looking into Ethereum and its potential in the finance sector. Although technical specifications and details of the Russian central bank’s national digital currency project remains undisclosed, in 2016, the Bank of Russia announced the development of an Ethereum-based interbank blockchain prototype called Masterchain. Some of the largest commercial banks in Russia participated in the pilot test, and the Bank of Russia’s Deputy Governor recently expressed her optimism toward cryptocurrency.
“Regulators of all countries agree that it’s time to develop national cryptocurrencies, this is the future. Every country will decide on specific time frames. After our pilot projects, we will understand what system we could use
Bitcoin or a ‘Palestinian Pound,’ a digital currency inspired by Satoshi Nakamoto’s innovation, could potentially be used to propel the independence and financial sovereignty of Palestine, as Azzam Shawwa announced at a European Bank for Reconstruction and Development meeting over May 9-11.
The unstable political and socio-economic situation in the Middle East has been a hindrance to the empowerment of Palestinians for many years. Palestinians have been forced to use several currencies in order to access wealth and be able to pay for services. Since they do not have any currency of their own they are required to use the euro, or the U.S. dollar, the Israeli shekel or the Jordanian dinar in their daily lives. This, of course, is not a viable economic option. However, bitcoin might solve this and become a game changer for Palestinians.
Reuters recently revealed that Palestinian officials could soon start developing its own digital-only currency, or even adopt bitcoin as its national currency. According to the head of the Palestine Monetary Authority (PMA), this is considered to be a move designed to safeguard against potential Israeli interference. Other options, such as keeping the status quo of using four currencies, or formally adopting one of them are also under consideration but according to the PMA representative said the digital route was the preferred one.
But it is unclear how the planned e-pound would skirt the 1994 Paris Protocol agreement which gave the PMA the functions of a central bank but without the ability to issue currency. The protocol recommended the use of the shekel and gave Israel an effective veto over a Palestinian currency.
The agreement and resulting violence lead to a restriction on the freedom of movement of people within the territory. Consequently, Palestinian Territories are very vulnerable to “fluctuations in the flow of