In an effort to stay up with the quick speed of technological advancement, the financial regulators in Britain opened up public comment on their new “sandbox” for trading digital assets in “real world situations” on Wednesday.

Within a strictly regulated market, new services can be tested with actual consumers thanks to a “sandbox”.

In joint proposals, the Financial Conduct Authority and the Bank of England stated that new regulations would be added to the sandbox to allow businesses to test out new technologies, like distributed ledger technology or blockchain, which powers cryptoassets, for trading and settling digital bonds and stocks.

Draft guidelines on how businesses would apply to operate inside the sandbox and scale up operations are being consulted by the regulators.

“For the first time, they will be able to provide these services from a single legal entity,” the BoE and FCA said.

“The adoption of new technology in this area, if done safely, could lead to a technological transformation that will promote greater efficiency as well as greater resilience in the financial system in the long run.”

The five-year-old sandbox might pave the way for a permanent regulatory framework for securities settlement, which exchanges bond or stock ownership for cash.

The final guidance will be released in the summer, and the consultation period is open until May 29.

(Adapted from ThePrint.in)

Categories: Economy & Finance, Regulations & Legal