March 27, 2024
UK's upcoming Digital Securities Sandbox
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FCA Unveils Plans for UK’s Second Cryptocurrency Sandbox Focused on Digital Securities

The United Kingdom is set to establish its second cryptocurrency sandbox by the first quarter of 2024, with a specific focus on digital securities.

During her address at the CCData Digital Asset Summit on October 3, Helen Boyd, the head of capital markets at the Financial Conduct Authority (FCA), disclosed that the Digital Securities Sandbox, to be launched by His Majesty’s Treasury at the end of Q1 2024, will have a unique focus. While the FCA operates as an independent financial regulator, it operates under the purview of the U.K. Treasury.

Boyd highlighted the distinction between the upcoming Digital Securities Sandbox and the already operational Digital Sandbox, introduced by the FCA in July 2023. The FCA’s Digital Sandbox is designed to assist technology companies in their initial stages of product development. In contrast, the Treasury’s Digital Securities Sandbox will feature a new rule set enabling it to engage in novel activities related to digital securities. According to the official announcement of the Digital Securities Sandbox, it will provide companies with an opportunity to establish financial market infrastructures that leverage digital asset technology, capable of performing various activities in connection with digital securities within a temporarily modified legislative and regulatory framework.

Boyd also shed light on the FCA’s future role as the primary regulator for cryptocurrency in the United Kingdom. She clarified that the agency is awaiting the Treasury’s decision regarding the extent of authority to be granted to the FCA. British regulatory authorities have recently demonstrated strict oversight of the digital assets industry, with the Treasury contemplating a comprehensive ban on cold calls related to cryptocurrency investments and the FCA issuing final warnings to local cryptocurrency businesses that fail to comply with its marketing regulations.

Image by pixabay

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