FCA considers regulating blockchain

UK authority outlines concerns with regulating blockchain technology within new consultation paper.

The UK’s Financial Conduct Authority (FCA) is looking into separately regulating blockchain as some aspects of the technology do not fit with current regulation.

In a newly published consultation paper, the FCA outlined its approach to blockchain and explained historically it has been ‘technology neutral’ and decided against regulating certain technologies.

The authority said this approach is designed to accommodate innovation and avoid arbitrage and unfair competition.

However, blockchain currently does not fit with certain regulations the FCA imposes despite still achieving its desired outcomes.    

“We may, therefore, need to consider whether our rules prevent or restrict sensible development that would benefit consumers and hence whether changes may be needed,” the consultation paper said.

The FCA continued it does not see a “clear need to consider changes to our regulatory framework for blockchain solutions to be implemented” at this stage.

To assess the potential risks with regulating blockchain, the FCA has asked participants to consider if the technology fits with the current regulatory framework.

The consultation ends on 17 July this year and the FCA will release its findings once the responses have been reviewed.