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The UK Government has launched a consultation process to establish a Digital Securities Sandbox (DSS), aimed at testing innovative market infrastructures for digital assets.
Through the DSS, companies will have the opportunity to simulate the operations of a central securities depository and trading venue using distributed ledger technology (DLT) to facilitate digital assets.
The decision to initiate the consultation follows a previous Call for Evidence conducted in 2021, which explored the potential application of DLT in financial market infrastructures. Feedback from industry participants highlighted the need for a supportive legislative framework in the UK to accommodate the use of DLT.
The Sandbox will provide a platform for testing the technology through temporary modifications to existing legislation, with the flexibility to make adjustments to the legislative frameworks as the testing progresses.
The consultation seeks input from industry stakeholders regarding the approach to the DSS and invites feedback on various policy and legal considerations. Furthermore, interested parties are encouraged to express their formal interest in utilizing the DSS, as early discussions with potential applicants are intended to commence.
The consultation period will conclude at 11:59pm on August 22, 2023.
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