[Bank of England and FCA launch digital securities sandbox]
The Bank of England (BoE) and the Financial Conduct Authority (FCA) have launched a Digital Securities Sandbox (DSS) program to explore the application of digital ledger technology (DLT) in financial securities. The sandbox will allow companies to test the potential benefits of DLT, such as increased market efficiency, transparency and resiliency, with the potential to reduce costs and speed up processing.
The FCA said the DSS will facilitate the trading, settlement and issuance of digital securities in the UK, consistent with regulatory requirements from the Bank of England and the FCA. This initiative aims to strengthen the UK’s position as a global financial center and support investment and sustainable growth.
All companies legally registered in the UK can apply to participate in the DSS, regardless of size or stage. The program will run until December 2028, with applications due in March 2027. DSS is divided into four phases: testing, launch, expanded functionality and permanent system. The second phase will involve the actual issuance, trading and settlement of digital securities, including stocks, bonds and other financial instruments.
The Bank of England and the FCA will jointly pursue the goal of promoting a safe, efficient and sustainable financial system and ensuring financial stability and market integrity.