UK Unveils Next Steps for Digital Securities Sandbox
The UK government outlined the next steps this week to establish a financial sandbox. The move will allow companies to test tokenized versions of traditional securities.
By enabling experimental pilot programs, officials hope to position the country as an innovation hub for asset tokenization and digital securities. Particularly, this is as the technology moves toward mainstream viability.
- The government says further legislation can be introduced as needed.
- Initiative overseen by the Bank of England and the Financial Conduct Authority
Read more: Dubai Crypto Blueprint Sets An Example For Global Nations
UK Addressing Calls for Regulatory Clarity
In response to a consultation on the digital securities sandbox distributed in July, the Treasury said Wednesday that bold flexibility will be preserved so the environment can nurture emerging use cases.
Many respondents emphasized the need for adaptable oversight given the nascency of asset tokenization technology and applications. There were also calls for clearer tax guidance within the pilot sandbox.
Officials stated that additional legislation can be fast-tracked as the sandbox evolves to provide desired clarity around thorny areas like compliance and taxes. Additionally, ongoing collaboration with the industry will help identify key friction points to address through new policies.
Read more: Ledger Vows Compensation For $600,000 Hack Victims
“The government will work with the regulators and industry to identify any further legislative provisions that need to be brought into scope, and if necessary can facilitate this via further statutory instruments amending the DSS,” said the consultation response.
The UK digital securities sandbox aims to spur innovation around the cryptocurrency-powered digitization of traditional financial instruments like debt and equity. As blockchain transforms traditional finance, the UK’s targeted regulatory bridge promises to capture a new wave of economic activity.Ā