The UK Plans to Launch a Digital Securities Sandbox in 2024
The United Kingdom is set to establish its second crypto sandbox, specifically focused on digital securities, by the first quarter of 2024. Helen Boyd, the head of capital markets at the Financial Conduct Authority (FCA), announced this during her speech at the CCData Digital Asset Summit on October 3. The FCA, although an independent financial regulator, falls under the jurisdiction of the UK Treasury.
Boyd explained that the forthcoming Digital Securities Sandbox will differ from the existing Digital Sandbox launched by the FCA in August 2023. While the FCA’s sandbox supports tech firms in early product development stages, the Treasury’s Digital Securities Sandbox will introduce a new rule set that allows it to explore new possibilities with digital securities.
The official announcement of the Digital Securities Sandbox outlines that it will enable companies to establish financial market infrastructures utilizing digital asset technology within a temporarily modified legislative and regulatory framework.
FCA’s Role as Principal Crypto Regulator
Boyd also discussed the future role of the FCA as the principal regulator for crypto in the UK. She mentioned that the agency is awaiting a decision from the Treasury regarding the extent of power that will be granted to the FCA.
UK Regulators’ Stringency Towards Crypto
In recent times, British regulators have been displaying strictness towards the digital assets industry. The Treasury is considering a complete ban on cold calls related to crypto investments, while the FCA has issued a final warning to local crypto businesses that fail to comply with its marketing rules.
Hot Take: UK Embracing Innovation in Digital Securities
The launch of a dedicated Digital Securities Sandbox by the UK Treasury demonstrates its commitment to fostering innovation and growth in the digital securities sector. By creating a new rule set and temporarily modifying legislative and regulatory frameworks, the sandbox will provide companies with an opportunity to explore the potential of digital asset technology in financial market infrastructures. This move further solidifies the UK’s position as a leading hub for blockchain and crypto innovation, attracting both domestic and international players in the industry.
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