The Chancellor Rishi Sunak has set out proposals following recommendations made in the recent Fintech Review.
The key proposals of interest to tech lawyers are:
- new FCA ‘scale box’ and Centre for Finance, Innovation and Technology with the aim of boosting growth; and
- the UK to lead digitisation of finance with a central bank digital currency taskforce and support for new technologies and infrastructure.
FCA ‘scale box’ and Centre for Finance, Innovation and Technology
To support fintech firms to scale up, the FCA will take forward a ‘scale box’. This is a package of measures to enhance its regulatory sandbox, which has allowed start-ups to test new propositions, and to provide a one-stop shop for growth stage firms. It will also launch the second phase of its Digital Sandbox to enable firms to test concepts that tackle sustainability and climate change-related challenges, aiming to help to deliver a greener financial sector that supports the transition to net zero.
The Chancellor also supports the creation of an industry-led Centre for Finance, Innovation and Technology and has committed to work with regional and national fintech bodies to make it a reality. The Centre would work closely with the regional hubs to identify and address sector challenges in support of fintech growth across the UK.
Digitalising financial services
The Chancellor also set out new initiatives on digitalising financial services. A new Taskforce, bringing together HM Treasury and the Bank of England, will be established to explore a possible UK central bank digital currency. Two new forums will also be established to engage technical experts, and key stakeholders (including financial institutions, merchants, business users, civil society groups, and consumers) through the process.
To support private sector innovation, firms exploring how to use technologies like distributed ledger to improve financial market infrastructure will have access to a new sandbox. This new regime will be inspired by the FCA’s sandbox and HM Treasury will work with the Bank of England and the FCA to deliver this. In addition, the Bank of England has launched a new ‘omnibus’ account to allow access to innovative financial market infrastructure providers that can support delivery of faster, cheaper, 24-hour wholesale payment and settlement using central bank money.
