FCA’s ‘regulatory nursery’ to offer immediate post-authorisation support and guidance for new firms.
UK Chancellor of the Exchequer wants case for “Britcoin,” instead of bitcoin, examined.
NatWest will take “cautious approach” in dealing with business customers who accept cryptocurrencies.
Find out more on these stories below.
Treasury and Bank of England launch taskforce to explore potential central bank digital currency
Mr Rishi Sunak, UK Chancellor of the Exchequer, made the announcement while launching the FinTech Week Conference on Monday.
"We're launching a new taskforce between the Treasury and the Bank of England (BoE) to coordinate exploratory work on a potential central bank digital currency (CBDC)," he said.
The central bank-backed digital version of sterling could disrupt lending firms in the current system since clients could then hold accounts directly with the Bank of England. However, Mr Sunak emphasised that no decision would be made on introducing CBDC to the UK market without both rigorous analysis of the risks and rewards of the move, and broad engagement with all stakeholders. Digital sterling would not replace cash or existing bank accounts.
Scores of other central banks are exploring digital currencies, with the Bahamas, Cambodia and China ranking highest for maturity of their retail digital currency projects and the latter a front-runner to launch a CBDC. Meanwhile, the European Central Bank earlier this week published the results of a public consultation process on a possible digital Euro in the future.
Read more on this story at Reuters.
NatWest's “cautious approach” to cryptocurrencies, will be responsive to evolving regulatory environment
During an online shareholder briefing on Wednesday Mr Morten Friis, head of NatWest's risk committee, said that NatWest will not serve business customers who accept payment in cryptocurrencies such as bitcoin, which the UK lender has categorised as “high risk.”
He said that this stance referred to businesses backed by cryptocurrencies or transacting mainly in them. While he regarded cryptocurrencies as “high risk” after recent Financial Conduct Authority (FCA) warnings to crypto currency customers, he acknowledged that regulation in this area is evolving rapidly, adding that NatWest will watch FCA progress closely and respond accordingly. Mr Friis emphasised that NatWest will “continue to take a cautious approach, but we’ll watch how the market evolves.”
The cryptocurrency Bitcoin has jumped 93% in value this year. Notable companies recently announcing plans to accept cryptocurrency payments have included Tesla, Lush and WeWork.
Read more on this story at The Guardian.
FCA introduces regulatory nursery initiative in support of newly authorised fintech institutions
The CEO of the UK’s Financial Conduct Authority, Nikhi Rathi, unveiled the initiative during his speech at Fintech Week.
He explained that "the regulatory nursery will keep us in close contact with firms immediately post-authorisation so we can provide support and, where we need to, intervene earlier to steer firms in the right direction."
He believes this will both enrich oversight as the new firms grow into their regulatory moulds, and level the playing field for them against more established firms which have longer track records in the industry.
Mr Rathi also said the FCA’s successful fintech sandbox program pilot is expanding in scale and frequency, with a well-funded advertising campaign to support its broader rollout.
Additionally, the digital sandbox pilot-in partnership with The City of London Corporation, which proved invaluable during the Coronavirus response, will now recalibrate to focus on sustainability. This coincides with the first-ever appointment of a director of environment, social and governance at the FCA, Mr Sacha Sadan. His role will develop FCA policy on sustainable finance at home and abroad.
Welcoming Mr Sadan on board, FCA chief Rathi added “the FCA is rightly seen as an international leader on the role financial regulation should play in delivering a more sustainable and greener future.”
Read more on this story from the Financial Conduct Authority and Finextra.
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