As FinTech Week kicks off in the UK, the government has signaled that it is exploring the establishment of a national digital currency.
It also announced further details of its plans to help start-ups in the financial technology space scale their businesses.
The latter proposals – made in the wake of Ron Kalifa’s FinTech Review – were affirmed this morning by Chancellor of the Exchequer, Rishi Sunak.
They include a new Financial Conduct Authority (FCA) ‘scale box’ and a new Centre for Finance, Innovation, and Technology to hothouse growth in the FinTech sector, where the UK has been losing ground to the US over the past couple of years.
Firms exploring the use of technologies like blockchains and distributed ledgers will be encouraged to use the new initiatives, including the FCA sandbox.
However, the most exciting development is the announcement of plans for the UK to “lead the digitisation of finance” with a central bank digital currency taskforce, with additional support for new technologies and infrastructures.
This confirms that the government is exploring the concept of establishing a national digital coin, in the wake of China’s recent moves in this direction, the growing popularity of cryptocurrencies and digital tokens, and the Nasdaq listing of crypto exchange, Coinbox, last week.
Sunak said, “Our vision is for a more open, greener, and more technologically advanced Financial Services sector. The UK is already known for being at the forefront of innovation, but we need to go further.
“The steps I’ve outlined today, to boost growing FinTechs, push the boundaries of digital finance, and make our financial markets more efficient, will propel us forward. And if we can capture the extraordinary potential of technology, we’ll cement the UK’s position as the world’s pre-eminent financial centre.”
The new Taskforce will bring together experts from the Treasury and the Bank of England to establish whether it is feasible for the UK to establish a central bank digital currency (CBDC).
Reforms to the UK’s capital markets regime will also be consulted on this summer. In the meantime, the government will set out its formal, detailed response to the FinTech Review in a written statement to Parliament “shortly”, according to today’s announcement.
In related FinTech Week news, the Investing in Women Code is designed to improve access to finance for women. New data suggests that the 100 firms currently signed up to the joint government and industry initiative are more likely to invest in female-run businesses.
A report launched today by the government reveals that women and men were equally successful in applications for bank finance this year, albeit for smaller loans on average.
All-female teams also had a higher success rate in being taken forward for further consideration by the angel investors who participated than all-male teams.
Sunak said of the initiative this morning, “Backing Britain’s female entrepreneurs will create jobs and help us build back better.
“I’m pleased to see so many of our major banks and venture capital firms taking action by supporting the Investing in Women Code. And I call on others to follow suit and be part of a turning point in attitudes towards investing in female-led businesses.”