The post UK believes trial to embrace digital securities can protect ‘market integrity’ appeared on BitcoinEthereumNews.com.

The UK’s Financial Conduct Authority (FCA) and the Bank of England have officially launched the next phase of their Digital Securities Sandbox (DSS), enabling firms to explore distributed ledger technology (DLT) and tokenized securities within traditional financial markets. The DSS, which will be operational until December 2028, provides a structured environment for testing and implementing DLT applications, aiming to enhance market efficiency, transparency, and resilience. The initiative seeks to position the UK as a global leader in financial innovation by fostering conditions conducive to investment and sustainable growth. Divided into sequential stages known as gates, the DSS allows sandbox entrants to progressively increase their level of permitted activity as they advance through each phase. Activities will go live after the Gate 2 stage, involving the issuance, trading, and settlement of actual digital securities. These securities are designed to function similarly to traditional counterparts, facilitating use in repurchase agreements and derivative contracts. Eligible financial instruments encompass equities, corporate and government bonds, money market instruments, fund units, and emissions allowances. Open to UK-based firms of all sizes and development stages—including both existing financial institutions and new market entrants—the DSS invites applications until approximately March 2027. This timeframe allows regulators and participating firms to prepare for a potential transition to a new permanent regime, contingent upon the successful implementation of the new technologies. In conjunction with the DSS launch, the FCA and the Bank of England published Policy Statement PS24/12, outlining the final policy approach and addressing industry feedback. Per the Policy Statement, several targeted changes have been made following consultation. These include extending the scope to incorporate non-pound sterling-denominated assets and adopting a more flexible method for setting firm-specific limits during the go-live stage by introducing limit ranges instead of fixed limits. Additional adjustments involve reducing the minimum capital requirement for a…

---

Filed under: News - @ October 1, 2024 5:25 pm