Fineqia International, a company with a digital platform that enables companies to issue and administer debt and equity securities, is pleased to announce its U.K. subsidiary Fineqia Limited has been accepted to participate in the fourth cohort of the Financial Conduct Authority (FCA) Sandbox Regulatory Program.

Fineqia joins other participating companies including top banks such as Barclays Plc, HSBC Holdings Plc and the Royal Bank of Scotland Group Plc’s NatWest division as well as newer companies such as digital asset exchange platform BlockEx Limited and blockchain insurance company Etherisc Limited.

Fineqia Limited met the FCA Sandbox eligibility criteria and was among the 29 companies accepted out of 69 applicants. It will develop and test the issuance and administration of bonds backed by blockchain-based crypto assets, such as Bitcoin and Ethereum.

“This helps us develop a new asset class within the regulatory protected environment offered by the FCA Sandbox program,” said Fineqia’s CEO Bundeep Singh Rangar. “It’s testimony to the team’s effort and commitment toward a disciplined and compliant rollout of a new financial product. Worldwide demand for borrowings against crypto holdings is increasing and with this test, we intend to demonstrate our ability to successfully tap into this growing market.”

Fineqia Limited will utilize a blockchain-based digital platform to automate all key steps in the financial product lifecycle, such as term coordination, legal documentation, deal subscription and ongoing administration in view of facilitating secondary trading of this innovative financial product after successful completion of the testing phase. Secured bonds will be more efficiently and compliantly executed using a blockchain infrastructure with crypto assets used as collateral.

The regulatory sandbox allows firms to test innovative products, services or business models in a live market environment while ensuring that appropriate protections are in place. It is part of Innovate, an initiative kicked off in 2014 to promote competition in the interest of consumers. Since its inception Innovate has had over 1,200 applications and has supported more than 500 firms. The sandbox was a first for regulators worldwide, underlining the FCA’s commitment to innovation in financial services.

Christopher Woolard, executive director of Strategy and Competition at the FCA, said:

“I am pleased to say that this is the largest sandbox cohort to date with a record number of applicants meeting our eligibility criteria. Cohort 4 has seen a large increase in the number of firms testing wholesale propositions including firms that are aiming to increase the efficiency of the capital-raising process. Alongside these we can see significant use of distributed ledger technology (DLT), some experimentation with crypto assets which will help inform our policy work and propositions aimed at helping lower-income consumers.”

The FCA received 69 applications to Cohort 4 of the regulatory sandbox, an increase on the number of applications to Cohort 3. Twenty-nine firms will proceed to test.