FCA reviews blockchain as part of Project Innovate

Technology Computer Binary

The FCA is reviewing the technology behind virtual currency bitcoin as part of Project Innovate.

Blockchain works by providing a secure shared data service on assets, allowing firms to transact via a shared messaging system.

In an interview with the Financial Times, FCA director of strategy and competition Chris Woolard says: “We do think [blockchain] has got some potentially interesting applications and we are talking to firms thinking about how to apply that to financial services and how it could benefit consumers or indeed make the business of compliance easier.

“There may be areas where we might want to encourage it a bit.”

The regulator says it is considering approving “a small but significant number of firms” using blockchain technology.

In its first year, Project Innovate has assessed 177 companies and approved 40 of them.

Some regulators have been wary of blockchain technology, warning the system could be vulnerable to fraud or undermine financial stability.