The UK's Financial Conduct Authority (FCA) and the Bank of England have launched the next phase of their Digital Securities Sandbox (DSS), allowing firms to explore distributed ledger technology (DLT) and tokenized securities in traditional financial markets. The DSS aims to enhance market efficiency, transparency, and resilience while positioning the UK as a global leader in financial innovation. Activities will commence after the Gate 2 stage, involving the issuance, trading, and settlement of digital securities, and eligible financial instruments include equities, bonds, and fund units. The DSS is open to UK-based firms of all sizes and development stages, and applications will be accepted until around March 2027. The FCA and the Bank of England have published a policy statement outlining the final approach and making targeted changes based on industry feedback. The DSS aims to contribute to a safe, sustainable, and efficient financial system by exploring the potential of DLT and other emerging technologies in the UK's financial markets.



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