UK to Launch Digital Securities Sandbox in January 2024: Championing Crypto Innovation
Summary:
The UK's Financial Services and Markets Act is set to enact provisions for a digital securities sandbox in January 2024. Introduced to Parliament, the sandbox will allow cryptocurrency firms to test their products and services within the country. The Bank of England and the UK Financial Conduct Authority will supervise the operation and implementation of new technologies in the financial market. This move compliments other legislation aimed at regulating digital assets and combating their illicit usage.
The United Kingdom's new laws regarding a digital securities sandbox of the Financial Services and Markets Act are expected to be active from January 2024, following their introduction to Parliament. The UK government released a notice on December 18 outlining the rules of the 2023 Financial Services and Markets Act's Digital Securities Sandbox (DSS). This paves the path for cryptocurrency companies to trial their services within the country. The new rules are to be executed on January 8, with the Bank of England and the Financial Conduct Authority supervising the sandbox.
“The DSS will afford companies and regulators the opportunity to evaluate new technology's application within our financial markets,” was articulated in a briefing note explaining the act. The trial will primarily focus on how emerging technologies (such as distributed ledger technology, or more broadly technologies associated with 'digital assets') can function within the securities depository services (specifically notary, settlement, and maintenance), and operate a trading venue.”
The inception of these sandbox rules was part of the Financial Services and Markets Act which was passed in June, following its introduction in 2022. This act also provided a framework for cryptocurrency enterprises to work within the UK, fostering technological innovation without compromising consumer protection.
Legislators in the UK have also passed other laws aimed at curbing illegal activities involving digital assets. For instance, in October, the Economic Crime and Corporate Transparency Bill was passed, which equipped officials with the powers to confiscate cryptocurrencies and also outlined plans to regulate stablecoins.
Countries like Brazil and the European Union as well as agencies like the United States' Securities and Exchange Commission and Commodity Futures Trading Commission have all shown interest in establishing similar regulatory sandboxes to study potential applications of tokenization.
Published At
12/18/2023 11:55:00 PM
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