We are launching a discussion to start a dialogue on the potential for future development of distributed ledger technology (DLT) in the markets we regulate. We are particularly interested to explore where the balance of risk and opportunities may lie in relation to DLT.
We are committed to fostering innovation that advances our objectives. Innovation can arise from diverse sources, such as start-ups, technology providers as well as regulated firms, including large financial institutions. They all have the potential to challenge existing business models, products and methodologies to benefit consumers and markets as a whole.
DLT is an example of rapidly developing technology which offers exciting potential to support the needs of consumers and the market. DLT may also present new challenges and potential risks. For example, how regulated firms allocate responsibilities for systems shared among them.
We generally take a ‘technology neutral’ approach to regulating financial services and are interested in considering whether there is anything distinctive about DLT which would require us to take a different approach.
This Discussion Paper is aimed at both users and providers of DLT solutions in the sectors which we supervise.
Once we have received responses, we will review these and decide on our next steps. This might take the form of a Summary of Responses, or if we want to take a closer look at our requirements, a Consultation Paper.
We will continue to learn from the use cases being tested in the Regulatory Sandbox. Additionally, we look forward to engaging with the industry through our planned series of events, roundtables and bilateral discussions on the subject of