The Bank of England (BoE) and the FCA have unveiled their latest initiative, the Digital Securities Sandbox (DSS), aimed at fostering innovation in the realm of digital assets within traditional financial frameworks.
According to Finextra, this groundbreaking project follows extensive consultations and is poised to test legislative adjustments concerning digital securities and their market impact.
The DSS is crafted to support companies that are pioneering with technologies like distributed ledger technology (DLT), which are typically linked to activities managed by Central Securities Depositories and trading platforms. By participating in the sandbox, firms can experiment with these advanced technologies, thereby potentially transforming conventional financial market processes.
“We encourage firms that are innovating in financial market infrastructure to apply and have published guidance to help them,” the BoE and FCA jointly stated. They also mentioned that companies could arrange pre-application meetings to better grasp the sandbox’s requirements, ensuring a thorough understanding of the regulatory landscape.
The sandbox aims to achieve three primary objectives: to facilitate innovation for a secure, sustainable, and efficient financial system; to safeguard financial stability; and to maintain market integrity and cleanliness. “Firms will be able to explore the benefits of these new technologies and practices in traditional financial markets. We’ll work together with the Bank to operate the DSS,” the FCA added.
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