Chancellor Philip Hammond is to launch a cryptocurrency task force and further measures to support the fintech industry.
Speaking at the Treasury-hosted International Fintech Conference, Hammond outlined the government’s new fintech strategy, pointing out that the sector employs 60,000 and contributes £6.6 billion a year to the UK economy.
Hammond said: ‘We are committed to building the most pro-growth and pro-innovation regulatory environment in the world for fintech’.
To accomplish this, he said the Financial Conduct Authority and Bank of England will work towards automating regulatory compliance, with a view to reducing costs for firms, removing ‘a key barrier for fintechs as they enter financial services markets’.
Two regtech pilots are expected to be running by the end of the year.
The cryptocurrency task force will consist of HM Treasury, the Bank of Endlgand and the FCA and will look to explore the risks of such assets and the potential benefits of distributed ledger technology.
The task force is expected to report back in the summer.
The government will also look to develop a set of standards that will make it easier for fintech firms to partner with banks.
This will be published by the end of 2019 and Barclays, Lloyds, HSBC, RBS and Santander have already committed to implementing them.
Further measures will see the appointment of three fintech regional envoys covering England, Wales and Northern Ireland ‘to promote the adoption of fintech by regional banks and building societies, complementing the work of the existing Scottish envoys’.
In addition, the chancellor revealed a ‘fintech bridge’ agreement with Australia, that will allow UK fintech firms to sell their products and services there.
He stated: ‘Today’s UK-Australia Fintech Bridge agreement is our most ambitious to date. It will bring together our regulators, policy makers, and private sectors to build an improved fintech ecosystem to support the growth of our fintech markets.’
Commenting on the chancellor's speech, Matt Smith, CEO of regulatory tech firm SteelEye, said: 'It comes as no surprise then that Philip Hammond not only announced a fintech strategy today, but recently revealed the imminent launch of a Fintech Strategy Group to help boost innovation and continue the UK’s domination of the sector.
'At this time of intense scrutiny and regulation in the financial services industry, it’s crucial that fintechs work not against but alongside and in support of, the regulators, in order to realise the benefits these new regulations can bring, such as increased transparency within financial services and the creation of a fairer, more competitive market.'