Bank of England and FCA launch Digital Securities Sandbox

Ezra Reguerra11 hours agoBank of England and FCA launch Digital Securities SandboxThe regulatory sandbox aims to strengthen the United Kingdom’s position as a global financial hub.1220 Total views2 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTCOINTELEGRAPH IN YOUR SOCIAL FEEDFollow ourSubscribe onThe Bank of England (BoE) and the United Kingdom’s financial regulator have launched a sandbox to explore how digital ledger technology (DLT) can be used in the notary, maintenance and settlement of financial securities. 

On Sept. 30, the BoE and the Financial Conduct Authority (FCA) announced the Digital Securities Sandbox (DSS), which allows companies to explore the benefits of DLT for financial securities. 

The FCA recognized that developing technologies have the potential to bring efficiency, transparency and resilience to markets. The regulator said that if the technologies are implemented successfully, they could lead to “savings across markets and their users” by making processes cheaper and faster. 

The regulators highlighted that the DSS will facilitate the trading, settlement and issuance of digital securities in the UK. This will be done on programmable and distributed ledgers while complying with BoE and FCA regulations. Strengthening the UK’s position as a financial hub

According to the FCA, the initiative will strengthen the UK’s position as a global financial center. The financial regulator said it will create the right conditions for investment and sustainable growth. 

Firms at all stages and sizes are welcome to apply to participate in the DSS as long as they are legally registered in the UK. The FCA wrote: “This could be an existing financial institution that is already authorized or recognized under current regulation or a new entrant to the market.” 

The FCA noted that the DSS will run until December 2028, but can be extended. The window for applications to participate in the sandbox will close in March 2027, allowing regulators and companies to transition to a more permanent regime. 

Related:European Blockchain Sandbox onboards 41 regulators in second cohortSettling real digital securities

The BoE highlighted that the DSS will have four stages: testing, go-live, scaling and a permanent regime. 

The regulator highlighted that in its second stage, the DSS will include issuing, trading and settling real digital securities, which are used in a way similar to traditional securities. According to the BoE, this could include equities, corporate and government bonds, money market instruments, fund units and emissions allowances. 

The BoE also added that it would pursue three goals with the FCA. They include promoting a safe, efficient and sustainable financial system, protecting financial stability and ensuring market integrity. 

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