The Financial Conduct Authority (FCA) and the Bank of England (BoE) have jointly announced the launch of a Digital Securities Sandbox (DSS), designed to foster innovation in the realm of digital assets. The DSS aims to support firms in integrating digital technologies, such as Distributed Ledger Technology (DLT), with traditional financial infrastructures.
This initiative follows a consultation process, offering companies a platform to test new technologies, explore legislative changes, and assess their potential impact on the financial markets. The regulators are encouraging firms innovating in financial market infrastructure to apply, and are providing pre-application meetings to help businesses understand regulatory requirements.
The FCA noted that the DSS will enable participants to simulate activities associated with Central Securities Depositories (CSDs) and trading venues, allowing them to explore the benefits of emerging digital technologies in traditional financial markets.
Both regulators emphasize that the DSS is built to maintain financial stability, market integrity, and to ensure the financial system remains safe and sustainable.