UK Government to set up Digital Securities Sandbox
The DSS will enable firms to model the operations of a central securities depository and trading venue using distributed ledger technology to accommodate digital assets. The consultation follows a Call for Evidence in 2021 to examine the application of distributed ledger technology for financial financial market infrastructures.
A key issue identified by market participants at the time was that the UK legislative framework has not been built to support the use of DLT in financial markets. The Sandbox is seen as a way of testing the technology using temporary modifications to existing legislation, with the power to alter legislative frameworks as the tests progress.
The consultation invites feedback from industry on the approach to the DSS, and seeks feedback on some further policy and legal issues. It also invites respondents to formally express their interest in using the DSS, on the basis that conversations with potential applicants should begin as early as possible.
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