Silicon Round-up: Blockchain banking to be on the slate for new regulator?Comments Off on Silicon Round-up: Blockchain banking to be on the slate for new regulator?
One such release was ‘Banking for the 21st Century’, a paper from the Treasury.
The document sets out suggestions about how to increase competition in financial services from challenger banks and upstarts in FinTech, confirming that the new Payment Systems Regulator (PSR) will kick into life in Apil.
“The payments council was previously owned by and controlled by several incumbent institutions. The PSR has been set up to enable new challenger companies to participate,” says Claire Cockerton, chief executive of FinTech trade body Innovate Finance.
“It’s an incredible innovation that we are incredibly supportive of. We worked with the payment systems regulator to consult with our membership and share our views about how to drive more innovation in the sector.”
Smaller companies will be given fairer access to the so-called ‘rails’ that payment systems run on, enabling cheaper and faster transactions.
But, most intriguingly, Cockerton says she’s also been talking to the regulator about incorporating blockchain technology, which underpins bitcoin, into mainstream payment systems.
“These are decentralized ledgers that speed up the transaction processing and lower the costs for institutions,” says Cockerton.
“It could revolutionise the payments infrastructure. Many of the companies in Innovate Finance use blockchain technology. The PSR is very much aware of it and trying to decide what is the best way to use it and incorporate it into the current system.”
Bitcoin businesses ordered to crackdown on money laundering
The Treasury also announced this week that bitcoin businesses will now be subject to money laundering laws.
To many observers this may seem a blow to the digital currency, which is often praised by fans for its anonymous qualities.
Tom Robinson, director of the UK Digital Currency Association, says otherwise.
“We see the fact that it is at least being recognised in money laundering legislation as extremely positive, it gives the industry a lot of legitimacy,” he said.
“It’s going to be applied at the gateways of bitcoins, at the exchanges where you change pounds for bitcoin. Once you have the bitcoin then you are largely unregulated in terms of what you do.
“But it is a bit of a myth that you are completely anonymous. All Bitcoin transaction is recorded in a central ledger, the blockchain.”
Should sharing be caring?
The Treasury wasn’t the only one putting out documents during the Budget. The Department of Business, Innovation and Skills also published its response to the review of the so-called ‘Sharing Economy’ it commissioned last year.
The ‘Sharing Economy’ is a broad term for businesses that utilise spare resources – short term rental of homes, tools or almost anything.
The Government has endorsed almost all of the recommendations of report author Debbie Wosskow, founder of LoveHomeSwap.
But one plan buried within the document sounds worrying like an attempt to use the ‘Sharing Economy’ as a cloak for cuts.
Trial ‘sharing cities’ will be established in Leeds and Manchester, but in the later the report says the plan is to “achieve a significant shift from dependence on traditional health and social care services to enabling independence, self-reliance and strengthening community resilience”.
This sounds more like shifting than sharing, with the Government offloading its responsibility to those most vulnerable in the community. I hope I’m wrong.