Key Takeaways
The Bank of England and Financial Conduct Authority are consulting on the Digital Securities Sandbox (DSS) to integrate emerging technologies into UK financial markets;
Approved DSS participants will be allowed to offer securities services and operate trading platforms under new regulations for five years;
The selection of the DSS’s first participants is planned for Summer 2024.
The Bank of England (BoE) and the Financial Conduct Authority (FCA) are consulting their proposed guidance for the Digital Securities Sandbox (DSS).
The DSS is a regime that intends to adjust UK regulations to allow financial market participants to employ emerging technologies, like Distributed Ledger Technology (DLT), to trade and settle digital securities, including shares and bonds.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe – We publish new crypto explainer videos every week!
Those who get the green light to join the DSS will have the capability to offer both securities depository and settlement services and to run a trading platform within this new regulatory framework. The sandbox is set to run for five years.
Sheldon Mills, the Executive Director of the FCA, emphasized the innovative nature of the DSS:
The new Digital Securities Sandbox reshapes how we regulate by allowing firms to test regulatory changes using real world situations before these changes are made permanent. We hope this will be a more effective, collaborative and quicker way of delivering regulatory change.
The selection process for the inaugural group of sandbox participants will start in Summer 2024 after a thorough review of feedback from the ongoing consultation period ending May 29.
The UK Treasury has also previously consulted the digital security sandbox proposals in July 2023.
This initiative represents a stride towards integrating blockchain technology into the mainstream financial sector. By offering a regulated testing ground, the BoE and the FCA promote innovation and potentially transform the way securities are traded and settled.
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.
