Markets
‘Crypto Mom’ Hester Peirce Proposes US-UK ‘Digital Securities Sandbox’ for Blockchain Innovation
US Securities and Exchange Commission (SEC) Hester Peirce on Thursday proposed a new idea to boost innovation in the financial sector: a joint U.S.-UK “digital securities sandbox.”
What happened: This initiative It would create a safe environment for companies in both countries to experiment with blockchain technology for securities trading, without fear of regulatory sanctions.
Peirce’s proposal builds on an existing sandbox initiative by the Bank of England and the Financial Conduct Authority (FCA) designed to explore how distributed ledger technology (DLT) could improve the issuing, trading and settlement of securities .
“The sandbox is designed to generate real-world insights into whether distributed ledger technology can streamline the issuance, trading and settlement of securities without compromising investor protection, market integrity or financial stability,” he said Peirce in his letter.
Highlighting the potential benefits of a cross-border sandbox, Peirce suggested that including US-based companies in the UK sandbox could significantly improve innovation.
He noted: “A cross-border sandbox could be even more transformative than a purely domestic one. The United States and the United Kingdom are well-matched for such an experiment thanks to our shared commitment to capital markets as a cornerstone of a dynamic economy It is growing. .”
The proposed sandbox would allow companies to conduct business under the same regulatory conditions in both the US and the UK. This would facilitate a unified framework for testing DLT in financial markets.
Peirce highlighted the potential of a cross-border sandbox in providing valuable data and insights that could benefit both regulators and market participants.
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“The information sharing agreement between the SEC and UK regulators covering the joint sandbox activity would allow both regulators to learn from activities undertaken in both jurisdictions,” he added.
Peirce also highlighted the importance of this initiative for public benefit, allowing companies to access markets without the immediate burden of full regulatory compliance.
This, he said, could lead to greater innovation and more competitive markets. “The most important thing is that sandboxes can benefit the public.
Allowing companies to access markets without having to immediately comply with the full range of regulations provides a manageable entry point into highly regulated markets,” Peirce explained.
Peirce’s proposal comes at a time when both the US and the UK are recognized as global hubs for financial technology and innovation.
By joining efforts, he believes both countries can leverage their strengths to further push the boundaries of financial technology.
“A cross-border sandbox covering the issuance, trading and clearing of securities using DLT is particularly ripe for exploration,” he said.
What’s next: This initiative and its broader implications for digital asset markets will be key topics of discussion at Benzinga The future of digital assets event on November 19th.
Image: Shutterstock
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