- The UK will develop an official ‘digital asset sandbox’ as part of its strategy to enhance the digital asset sector in the country
- Chancellor Jeremy Hunt unveiled the plan in a recent ‘mini-budget’ yesterday
- The Digital Securities Sandbox, set for implementation in Q1 2024, will enable firms to utilize digital asset technology for financial market infrastructure
The UK is to get an official Digital Securities Sandbox (DSS) as part of its plans to scale up the digital asset sector in line with its plans to become a blockchain development hub. British Chancellor Jeremy Hunt revealed the new plan in the ‘mini-budget’ unveiled yesterday where he introduced 110 measures aimed at driving the nation’s economic growth. One of these was the DSS which the government hopes to implement in the first quarter of 2024. The DSS will provide a controlled environment for experimentation and innovation, allowing firms to leverage digital asset technology to create and operate critical financial market infrastructure.
UK’s Crypto Plans Going Full Steam
The UK’s blockchain plans date back to last April when then Chancellor, now Prime Minister, Rishi Sunak declared that he wanted Britain to become a “global cryptoasset hub,” starting with regulation of the sector. This has been ongoing ever since, with the country’s financial watchdog the Financial Conduct Authority whipping the sector into shape by announcing a register that all crypto-handling companies must be added to before they can operate.
The FCA has also hardened marketing rules to reduce companies advertising risky products to consumers, while a crypto asset bill has also been making its way through parliament.
Two Sandboxes to Play In
Under the plans announced yesterday, the UK government will pass legislation to establish the DSS early next year, with the sandbox designed to provide a controlled environment for experimentation and innovation within the digital asset market, allowing firms to leverage digital asset technology to create and operate critical financial market infrastructure. The London Stock Exchange has already put one foot in the future by experimenting with blockchain technology in order to revolutionize the trading of traditional financial assets.
The new Digital Securities Sandbox will differ from the existing Digital Sandbox launched by the FCA in August; while the FCA’s Digital Sandbox supports firms in the early stages of digital product development, the DSS is set to introduce a new rule set specifically tailored for digital securities, allowing for innovative applications of this emerging technology.