Eight blockchain and DLT-focused projects selected for UK FCA’s fifth cohort of regulatory sandbox

The UK Financial Conduct Authority (FCA) has announced the names of the firms that have been selected for the fifth cohort of its fintech regulatory sandbox.

According to the announcement, the regulator received 99 applications for the latest cohort – the largest number of applications it has received to date. It said that the majority of applications came from firms looking to operate in the wholesale and retail banking sectors.

Those which have been accepted into the cohort includes firms that working on digital identity solutions, platforms which tokenise issuance of financial instruments, and services aimed at facilitating greater access to financial services for vulnerable consumers.

Of the total 29 projects, eight are focused on blockchain or distributed ledger technology (DLT):

• Diro Labs which is developing identity verification service that would verify any person or document online directly from the original source. The solution provides provable, auditable and reportable evidence of Know Your Customer (KYC) and due-diligence in a shareable format through a central blockchain-based store of information.
• Nuggets, an e-commerce payments and verified digital identity platform, will test the storage of personal and payment data securely with blockchain, and the use of this data to access financial services products.
• Fintech Delivery Panel Partners will explore how consumers can take control over their digital identities and ‘port’ previously verified digital identities across different companies that rely on them to satisfy their customer due diligence and KYC obligations. This will see Deloitte, Evernym, uPort, Signicat and Onfido work with machine learning and blockchain technology.
• Fractal is developing a DLT and artificial intelligence (AI)-based platform that will facilitate SME financing and securitisation of SME debt, by digitising credit applications and connecting loan issuances to the underlying financial data.
• Karma is working on a DLT-based interest-free salary-advance and cash flow management product that would enable consumers to spend a portion of their salary every month at a range of different merchants.
• London Stock Exchange Group (LSEG) will test integrating DLT within LSEG-operated listing and trading venues to test market infrastructure for the issuance, admission and trading of equity securities, evidencing the change of beneficial ownership. It will carry out the test in collaboration with Nivaura and select market practitioners.
• Renso is developing a DLT-based real estate investment management platform.
• Torca is developing a platform that uses DLT to streamline the capital raising process, providing a one-stop-shop for issuing securities, including onboarding, raise-management and token issuing services.

“Tests will be conducted on a short-term and small-scale basis. We work closely with each firm to agree testing parameters and build in appropriate consumer safeguards,” FCA said.