The United Kingdom Financial Conduct Authority (FCA) announced it will pilot a digital sandbox intended to foster innovation from firms developing solutions addressing the COVID-19 pandemic on May 4.
While applications have not opened yet the FCA welcomes initial expressions of interest from firms.
FCA launches digital sandbox amid coronavirus
The FCA noted that it 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 expedite the development of solutions to COVID-19.
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.”
The FCA will also play a more active collaborative role within the Digital Sandbox, emphasizing that it will maintain “open dialogue” with industry while conducting the pilot to stimulate collaboration.
FCA to collaborate with sandbox participants
The FCA names a number of applications that it hopes to foster through the Digital Sandbox, including several that are synonymous with distributed ledger technology (DLT).
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.”
An “observation deck” to enable regulators and other interested parties to observe in-flight testing at a technical level” and “vendor market place[s]” are also named as initiatives it hopes the FCA hopes to foster — applications for which blockchain has been demonstrated to facilitate increased privacy, transparency, and significant efficiency savings.
Firms working to build application programming interfaces (APIs) or facilitate regulatory support relating to the coronavirus are also encouraged to express interest in the digital sandbox.
Blockchain mobilized to fight COVID-19
The coronavirus pandemic has highlighted the efficacy of blockchain-based solutions in tackling issues concerning data collection, privacy, and traceability.
In recent weeks, DLT has been employed in contact tracing, to track and distribute medical supplies, and to prove immunity to the virus.