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London FinTech environment among world's best


It’s official, London FinTech companies are attracting more investment than any other place in the world outside of Silicon Valley, according to CNBC.

So far, in 2019:

  • 114 deals worth $2.1 billion have been made

  • $200 million ahead of New York in the same period

London and the UK, in general, have launched a huge initiative to become leaders in this sector, and it seems to be paying dividends.


London Calling

Part of this is due to the regulatory environment, and in the UK, we see a proactive approach that is embracing the FinTech industry and not crowding out investors. 

If you’re interested in starting up a FinTech company in London, it might be useful to review just a few of the rules surrounding the issuance of digital currency. This will also help to show you the UK’s overall way of thinking when applied to the broader FinTech market.


FCA Guidance

The Financial conduct authority released new guidance in July of 2019 dealing with cryptocurrencies. This is an attempt to classify and regulate assets known as cryptocurrencies into three broad categories.

  • Security Tokens

  • E-money

  • Unregulated Token

Security Tokens

Security Tokens are regulated like securities and are defined in a similar. These are something like a replacement for a security instrument, and the owner has the same rights and obligations as a traditional security holder. These are regulated under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. The gist of it is if it is intended to function as an investment, it is regulated as a security token.


E-Money is what a FinTech might be more traditionally associated with, and it is money that represents electronically stored value that may be exchanged for another thing of value at another time. The issue of this money isn’t regulated, but the trade thereof is regulated under the FSMA’s electronic money regulations.

Unregulated Tokens

All other tokens or digital currencies are considered unregulated tokens. These tokens may have nonmonetary value, they may act as vouchers in the case of prepayment, or allow customers access to special offers. 


Regulatory Certainty

Within this narrow scope, the UK’s FCA shows that it generally will seek to fold the activities of FinTech’s within their general and established regulatory frameworks by categorizing the activities along the same lines. The environment is therefore predictable, and this helps propel the sector forward even when a lot of the FinTech world is worried that new regulations may stifle their business. In the case of the United Kingdom, we can see that the established regulatory environment is helping FinTech to succeed and be more trusted, which is helping to drive growth.

Arthur Shah-Nazarov