Emma RadmoreTreasury has published the outcome to the consultation on a digital securities sandbox. The sandbox will be operated by BoE and FCA and is intended to help facilitate the use of digital asset technology in UK financial markets.
Respondents generally supported the proposals, and the proposal that debt, equity and money market instruments should be in scope, and the Government now plans to set a broad framework in legislation and give flexibility to the regulators to manage requirements for participating entities. It notes that all relevant assets will be covered – derivatives are excluded simply because there is no derivatives-focussed legislation being amended, but there is no reason they could not be. Unbacked crypto will be subject to a separate workstream, once it has been brought within the regulatory framework. Soon, the Government will publish the secondary legislation it needs, and then BoE and FCA will set out the application process and guidance. So far, 19 firms have expressed interest in participating in the sandbox.