U.S. FinTech investments in 2016 reached $4.27 billion illustrating that the financial technology sector in the country is continuing to grow at a significant pace.

However, with this amount of FinTech investment you would naturally assume that the U.S. is one country where the topic of regulation is not an issue, reports Tech Crunch.

And yet, that’s not the case.

According to a report from Reuters in 2016, investments declined by around 30 percent in the U.S. even if the nation did still manage to bring in over $4 billion. However, while the U.S. is producing FinTech companies that are lucrative to investors, a report undertaken by the Treasury of the U.K. [PDF] found that the U.S. ranked last and second-to-last when it came to regulatory regimes, government programs, and taxation.

When mentioning regulators, the report references The Department of Business Oversight in California and the Department of Financial Services in New York and says:

Engagement with the regulator is mainly from a legal standpoint; FinTechs would benefit from a more collaborative approach.

Of course, with the number of FinTech companies growing to 4,000 in the U.S. and the U.K., the topic of financial technology has garnered much interest with investment expanding from $1.8 billion to $24 billion worldwide in the last five years.

The Answer: U.S. FinTech Sandbox

It seems, though, that the U.S. is intent on making changes happen even if they do at a slower pace compared to other countries.

Concerned that regulation is falling behind countries such as the U.K., America is taking steps to bridge the gap. In September, a House bill was introduced that would essentially copy the U.K.’s Financial Conduct Authority sandbox, to prevent financial businesses from moving to the U.K. Slightly caught off guard, the U.S. is now playing catch-up in what is quickly becoming a fast moving industry.

Yet, as Tech Crunch states uncertainty remains when it comes to international trade agreements and regulation for FinTech companies.

Even though bitcoin enthusiast Peter Thiel has been appointed on President Trump’s presidential transition team promising ‘to help the president in any way I can,’ and the U.S. Federal Research announced it was to outline how it intends to monitor FinTech innovations, not much has been mentioned in the way of FinTech regulation over the next four years.

It remains to be seen, therefore, how the U.S. will end up in the sector if startups find it too hard to establish themselves through an unclear regulatory environment.

Featured image from Shutterstock.