The Digital Securities Sandbox rules of the UK come under the purview of the 2023 Financial Services and Markets Act and will come into force within January 2024.
A couple of regulators will operate a sandbox for digital securities in the UK starting January 2024. The digital securities sandbox (DSS) rules were before the UK parliament recently. The rules are within the country’s 2023 Financial Services and Markets Act. With the move, the United Kingdom has marked another progressive step for crypto regulations. After the rules become law, crypto firms can test and explore various services and products.
Authorities published an official draft of the bill recently. At the same time, they also released a memo detailing the bill. Meanwhile, the Financial Conduct Authority and the Bank of England would operate the sandbox as UK regulators. The memo mentioned the crypto regulations would enable firms to test new technologies across the country’s financial markets.
Further, it said, “In particular, this will involve trialling the use of developing technology (such as distributed ledger technology, or in general technology that facilitates what are commonly referred to as ‘digital assets’) to perform the activities of a central securities depository (specifically notary, settlement and maintenance), and operating a trading venue.”
2023 has been a landmark year for crypto regulations in the UK. While several new rules have seen the light of the day, UK regulators have publicly supported it. Moreover, its central bank is also testing a central bank digital currency (CBDC), exploring all its use cases.
The Financial Conduct Authority (FCA) was one of the first regulators to convey the importance of crypto regulations to legislators in 2023. On the other hand, the Bank of England has proactively invited consultations with industry experts and academicians while drafting rules for crypto.
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