In a bid to become a worldwide crypto hub, the United Kingdom has announced that it will undertake live testing of blockchain technology during market activities such as trading stocks as well as bonds, and settlement of those completed transactions. These tests are scheduled to begin in 2023.
Gwyneth Nurse, the director general in charge of financial services at the United Kingdom’s Ministry of Finance, says the use of distributed ledger technology is a vital priority through which the infrastructure of finance markets can be made innovative and become efficient for its users.
According to Nurse, a “sandbox” will be unveiled next year, and its purpose will be to enable financial regulators to run tests on how DLT projects can work in the traditional financial markets of the United Kingdom. Under normal circumstances, the process of trading bonds, stocks and other securities requires three steps to be completed. The first is trading, the second is clearing the trade, and the third is settling that trade. This process is often time consuming, and the ministry is interested in deploying DLTs to quicken that process to just hours instead of days or even weeks.
Nurse also mentioned that the UK government was interested in testing how trading could be combined with settlement so that transactions can be completed instantly. The sandbox planned for launch next year will provide the perfect vehicle for regulators to test different best practices. The outcome of those tests would inform the government about what permanent changes it needs to make so that users can have a better experience while transacting in the market.
The Bank of England as well as the finance ministry are due to hold another public consultation toward the end of this year. The purpose of that consultation is to gather views from the public and stakeholders regarding the possibility of introducing a government-issued digital pound sterling. If the decision is made to issue a digital pound, members of the public can expect to start using such a digital currency between 2035 and 2040, Nurse revealed.
Meanwhile, the Financial Conduct Authority (FCA) issued another warning to consumers in May reminding them about the risks involved in trading cryptocurrencies. The watchdog agency mentioned in its advisory that while it wasn’t criminal to post on social media about cryptos, it was illegal to be specific and promote a particular cryptocurrency or NFT. The agency also reminded those promoting digital assets to include a disclaimer stipulating that their activities weren’t regulated by the FCA. This disclaimer is mandated by the law governing adverts of such assets.
Despite that, the interest in crypto and blockchain by the UK government is likely to be music to the ears of companies such as LQwD FinTech Corp (TSX.V: LQWD) (OTCQB: LQWDF) since it shows that governments around the world are beginning to recognize the potential of the industry to revolutionize how financial markets operate.
NOTE TO INVESTORS: The latest news and updates relating to LQwD FinTech Corp. (TSX.V: LQWD) (OTCQB: LQWDF) are available in the company’s newsroom at http://ibn.fm/LQWDF
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