The UK government has announced that it will not be including unbacked crypto assets and derivatives in its plans for a digital securities sandbox. The sandbox is a regulatory framework that will allow firms to test innovative new products and services related to digital securities.
The government said that it is not yet clear how to regulate unbacked crypto assets and derivatives, and that it wants to wait for more international coordination on this issue. However, the sandbox will still allow firms to test products and services related to native digital securities and tokenized representations of existing securities.
The decision to exclude unbacked crypto assets and derivatives from the sandbox has been met with mixed reactions. Some industry participants have said that it is a missed opportunity to promote innovation in the crypto space. Others have said that it is a sensible decision, given the current regulatory uncertainty around these assets.
The Digital Securities Sandbox is expected to launch in early 2024.
Here are some additional details from the announcement:
- The sandbox will be open to both UK and non-UK firms.
- Firms that want to participate in the sandbox will need to apply to the government.
- The sandbox will run for a period of 12 months.
- The government will provide firms with access to regulatory sandboxes, as well as guidance and support.
The announcement of the Digital Securities Sandbox is a significant development for the UK crypto space. The sandbox will provide a much-needed regulatory framework for firms that want to test innovative new products and services related to digital securities. It remains to be seen how the sandbox will be used by firms, and what impact it will have on the development of the UK crypto industry.
