A new global initiative is setting out to create a more constructive framework for financial regulators and financial innovators.
The UK’s Financial Conduct Authority is leading the initiative which will allow fintech companies to test innovations within a regulatory sandbox. The Global Financial Innovation Network (GFIN) is being set up to help a variety of fintech initiatives, notably ICOs and other distributed ledger technology projects.
A press release issued by the FCA on Tuesday stated, “The network will seek to provide a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale new ideas. It will also create a new framework for co-operation between financial services regulators on innovation-related topics, sharing different experiences and approaches.”
ICOs Will Be Able to Operate In a Light Regulatory Environment
The GFIN will act as a network allowing regulators to collaborate and share experiences, and provide a forum for joint policy work. It will also provide fintech firms with an environment in which to trial cross-border solutions.
In total 11 regulatory bodies are included in the GFIN, including those from Australia, USA, UK, Hong Kong, Canada, Dubai and Singapore. The FCA and the US Bureau of Consumer Financial Protection (CFPB) are now accepting recommendations for the initiative’s mission, ahead of its launch next year.
Over the last year, it has become clear that regulators are struggling to balance their mandate to protect investors, whilst still allowing innovation to happen. In addition, the environment is moving so fast that it is proving difficult to keep up. The launch of the new initiative indicates that regulators now appreciate that fintech, ICOs and blockchain tech are here to stay.