The Financial Conduct Authority (FCA) has asked for input from end users and providers of distributed ledger technology (DLT) regarding the potential for blockchain in financial services.
The organisation said it was particularly interested in exploring where the balance of risk and opportunities may lie in relation to DLT.
A 33-page discussion paper on DLT has been published by the FCA, covering what it understands are the key risks of blockchain, under the topics of: governance and technology resilience, DLT and distributed data, recordkeeping and auditability, smart contracts, and the use of digital currencies to deliver financial services.
The paper also covers a section on DLT's compatibility with the existing regulatory framework. Each section includes questions that the FCA would like responses to from customers and vendors of blockchain-based technologies.
"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," said the FCA.
"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," it added.
Responses to the discussion paper should be sent by 17 July 2017.
After reviewing the respones, the FCA may publish a summary of responses, or could release a consultation paper.
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