London’s wounded Fintech scene has unlikely hero post Brexit

Bloomberg

Brexit may have wounded London’s reputation as a leading hub for financial-technology companies, but now an unlikely hero is helping to protect its edge: the UK regulator.
Take SETL, a startup that seeks to harness blockchain technology. The London-based firm says it became the first to use the digital ledger, which is the same architecture bitcoin uses, to process a retail transaction using fiat, government-issued currency. The company’s chief executive officer says the U.K. regulator helped it sprint ahead.
“London is a financial center for fintech, and regulators get enormous credit for that,” said Peter Randall, CEO at SETL. The company raised $39.5 million from angel investors after Britain voted to leave the European Union, the biggest U.K. deal since the referendum, according to trade group Innovate Finance.
Randall said piloting his product would have taken considerably longer without the U.K.’s so-called sandbox, which is an experimental space for entrepreneurs where some regulations are waived. CEOs can bounce ideas off of officials.
Since 2010, the British government has been trying to encourage new types of finance as traditional banking struggled to recover from the financial crisis. For the sandbox program’s first run, the Financial Conduct Authority picked 24 firms out of 69 applications. The FCA took about four months to select the companies. Established firms with new ideas can also get involved.
“Demand has been significantly higher than expected,” said David Geale, director of policy at the FCA in London.
London needs every advantage it can get.