The Crypto Roundup: 04 October 2023 | CryptoCompare.com

The UK’s Finance Ministry, HM Treasury, is planning to introduce a Digital Securities Sandbox (DSS) by the end of the first quarter of next year, as revealed by Helen Boyd, the Head of Capital Markets at the Financial Conduct Authority (FCA), the country’s financial watchdog.

A sandbox describes a safe environment for testing new products before they enter the market. The FCA has a similar scheme called the Regulatory Sandbox, where firms with promising products can get feedback from a select group of customers.

Boyd was speaking yesterday at CCDAS, the Digital Asset Summit organized by CCData. She differentiated the FCA’s “traditional” sandbox and the upcoming DSS, which she said has a “new rule set that would allow it to do new things with digital securities.”

According to the FCA’s Capital Markets Director, this is a novel approach to regulation as in the past regulators “tended to wait for activity to come along and regulate it,” while now it’s looking at a “much more iterative process” and expects it to be a “learning curve.”

Per Boyd, the FCA is still waiting for “Treasury to firstly publish the results of its consultation and then move forward with the legislative part.” Once that’s done, the regulator will “be in a position to take forward those new powers and work out what the regulatory framework is that we will be writing the rules for.”

Boyd also said that she believes that tokenization is a key feature of blockchain technology that could transform the traditional finance world when conventional securities instruments are on-chain, as it could “revolutionize” trading, settlement, and clearing processes.

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• Source: https://www.cryptocompare.com/email-updates/daily/2023/oct/04/