Financial Conduct Authority (FCA) has announced that it will initiate a Digital Sandbox to promote innovation from firms developing solutions addressing the COVID-19 pandemic. While applications have not opened yet the FCA welcomes initial expressions of interest from firms.
On May 4, it has been reported that FCA has been exploring the concept of a digital sandbox since before the coronavirus outbreak.
However, the virus prompted the regulator’s decision to launch an early pilot to trial aspects of its digital sandbox to quicken the development of solutions to COVID-19.
It has been analyzed that the digital sandbox will offer enhanced versions of features currently available through the FCA’s Innovation Hub, Regulatory Sandbox, and TechSprint programs to allow “innovative firms to test and develop proofs of concept in a digital testing environment.”
Also, the FCA will play a more active collaborative role within the Digital Sandbox by emphasizing that it will maintain “open dialogue” with industry while conducting the pilot to stimulate collaboration.
The FCA names a number of applications that it hopes to promote through the Digital Sandbox, including several that are synonymous with distributed ledger technology (DLT).
As per the report, the regulator hopes to drive the development of “access to high-quality data assets including synthetic or anonymized data sets to enable testing and validation of technology solutions.”
FCA also hopes to foster an “observation deck” to enable regulators and other interested parties to observe in-flight testing at a technical level” and “vendor market place[s],” applications for which blockchain has been demonstrated to facilitate increased privacy, transparency, and significant efficiency savings.
Moreover, firms that are working to build application programming interfaces (APIs) or facilitate regulatory support relating to the COVID-19 are also encouraged to express interest in the digital sandbox.
Thus, the COVID-19 pandemic has outlined the efficacy of blockchain-based solutions in tackling issues concerning data collection, privacy, and traceability.