"SEC Commissioner Proposes Joint US-UK Digital Securities Sandbox for Innovation and Regulatory Alignment"

• SEC's Hester Peirce proposed US-UK digital securities sandbox for crypto firms.
• Firms can test technologies like DLT under regulatory oversight for two years.
• Peirce aims to allow innovation without immediate full compliance with regulations.
• Proposed micro-innovation sandbox would have monetary ceilings and anti-fraud provisions.
• Firms could seek no-action letters or exemptive orders during the two-year period.
• Cross-border collaboration could foster innovation and align regulatory approaches between the US and UK.

Summary :
Securities and Exchange Commissioner Hester Peirce has proposed a joint digital securities sandbox between the United States and the Bank of England. The sandbox would allow firms to use specified technologies, such as distributed ledger technology, and conduct the same activities under the same regulatory requirements in both countries. Peirce believes that sandboxes can facilitate innovation in highly regulated sectors and benefit the public by providing manageable entry points into regulated markets. This proposal is not the first time Peirce has advocated for exemptions for firms involved in newer technologies. While Peirce is supportive of crypto and technological developments, other SEC commissioners, including Chair Gary Gensler, are more inclined towards regulation. The SEC has recently taken enforcement actions against several crypto companies. The proposed cross-border sandbox aims to foster cross-border innovation and align the views of the UK and the US on capital markets. The UK has already proposed its own digital securities sandbox, which is expected to open for applications in the summer of 2024.

Sources :

- Blockworks
- TheBlock