The move comes a few months since the UK Financial Conduct Authority (FCA) announced its intention to promote fintech growth by offering a global regulatory sandbox.
The FCA has joined hands with a group of 11 financial organizations from all over the globe to form the Global Financial Innovation Network (GFIN) to drive cooperation between regulators and multinational firms. The alliance aims to promote financial technologies like blockchain and distributed ledger technology by offering a regulatory environment for companies to develop cross-border projects.
Along with the FCA, the group includes eleven other agencies: the Province of Ontario Securities Commission, Hong Kong Monetary Authority, Australian Securities & Investments Commission, Central Bank of Bahrain, Autorité des marchés financiers (Québec), Abu Dhabi Global Markets, Monetary Authority of Singapore, Dubai Financial Services Authority, Guernsey Financial Services Commission, and Consultative Group to Assist the Poor (CGAP). The US Bureau of Consumer Financial Protection (CFPB), which is also a member of the alliance, has itself launched a regulatory sandbox aiming to foster blockchain innovation.
The group is now open to feedback regarding the work and mission of GFIN before its full-scale launch next year. The companies can send their recommendations until October 14.
GFIN’s goal is to enable effective communication between regulators and innovative startups, allowing companies to expand their solutions in different countries. Also, the network will create a framework for regulators to interact and exchange their experience in innovative technologies and will launch a consultation on how GFIN will implement its goals, including what tools it will use.
“The creation of the Global Financial Innovation Network is an important next step for organisations like ours who are actively engaged in understanding and harnessing the benefits of innovation in financial services for consumers, while managing the potential harm,” said Christopher Woolard, executive director of strategy and competition at the FCA.
“The establishment of the GFIN can help share the experiences and knowledge from across different markets, while also providing a platform for innovative firms wishing to scale their propositions via testing in multiple countries.”
In February, the FCA called for the creation of the global regulatory sandbox that would allow fintech startups to test their solutions in overseas markets. As the FCA noted, the initiative would also help regulators to address cross-border problems like money laundering.
Just few weeks ago, the agency revealed that 29 companies, more than 40% of which are developing blockchain or distributed ledger technology-related solutions, joined the fourth cohort of its regulatory sandbox that was created in 2016. Two years ago, the Hong Kong Monetary Authority (HKMA) also launched a FinTech Innovation Hub and a FinTech Supervisory Sandbox in an effort to drive fintech development in the country.