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News

SEC’s Peirce Proposed New UK-US Cross-border Sandbox For Innovation

May 30, 2024 - Around 2 mins mins to read

Key Points:

  • Sandboxes boost innovation and help firms understand regulations.
  • Cross-border sandbox can transform markets and enhance transparency through tokenization.
SEC Commissioner Peirce proposed a cross-border sandbox for the UK and US to enhance innovation and transparency. It will boost tokenization and effective regulation.
SEC's Peirce Proposed New UK-US Cross-border Sandbox For Innovation

SEC Commissioner Hester M. Peirce presented a landmark proposal for a cross-border sandbox that will allow firms to engage in the same activities subject to the same regulatory conditions in both the UK and the US. It will encourage innovation and improve transparency in markets through tokenization.

Proposal for a Cross-Border Sandbox

The Bank of England and the Financial Conduct Authority proposed a joint digital securities sandbox that would incorporate innovation into the financial system.

The sandbox aims to generate real-world experience about the potential of distributed ledger technology to streamline the issuance, trading, and settlement of securities.

Commissioner Peirce advocates for an expanded sandbox open to US-domiciled firms. Coupled with a Commission-acted micro-innovation sandbox and an information-sharing agreement between the UK and US, cross-border innovation could thrive.

The Potential of Tokenization in Financial Markets

Firms participating in it would be able to operate under identical regulatory conditions in both countries. Statistical evidence supports the role of sandboxes in encouraging innovation.

Reports state that firms that enter the FCA’s sandbox raise more capital, are more likely to survive in the long term, and can better understand how regulatory requirements apply to their innovative services or products.

Readmore: KuCoin Delists Polyhedra’s Token Amid Battle For ‘ZK’ Token Symbol

Benefits of Regulatory Sandboxes for Innovation

More importantly, sandboxes benefit regulators by creating an environment that propels effective and efficient regulations.

A cross-border sandbox could be even more transformative than a domestic one, given the shared commitment of the US and UK to capital markets as the cornerstone of a dynamic economy.

Exploring the potential of tokenization to improve market transparency and reduce operational costs is a forward-looking area for such a sandbox. Commissioner Peirce’s proposal opens up an area for consultation on developing cross-border collaboration to facilitate innovation.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Author

Thana

I am a news editor at Coincu, where I produce daily editorial packages and manage the knowledge and review article sections. Before journalism, I earned a Bachelor's degree in Global Logistics and Supply Chain Management from Northampton University and studied news journalism at Press Association Training.
News

SEC’s Peirce Proposed New UK-US Cross-border Sandbox For Innovation

Key Points:

  • Sandboxes boost innovation and help firms understand regulations.
  • Cross-border sandbox can transform markets and enhance transparency through tokenization.
SEC Commissioner Peirce proposed a cross-border sandbox for the UK and US to enhance innovation and transparency. It will boost tokenization and effective regulation.
SEC's Peirce Proposed New UK-US Cross-border Sandbox For Innovation

SEC Commissioner Hester M. Peirce presented a landmark proposal for a cross-border sandbox that will allow firms to engage in the same activities subject to the same regulatory conditions in both the UK and the US. It will encourage innovation and improve transparency in markets through tokenization.

Proposal for a Cross-Border Sandbox

The Bank of England and the Financial Conduct Authority proposed a joint digital securities sandbox that would incorporate innovation into the financial system.

The sandbox aims to generate real-world experience about the potential of distributed ledger technology to streamline the issuance, trading, and settlement of securities.

Commissioner Peirce advocates for an expanded sandbox open to US-domiciled firms. Coupled with a Commission-acted micro-innovation sandbox and an information-sharing agreement between the UK and US, cross-border innovation could thrive.

The Potential of Tokenization in Financial Markets

Firms participating in it would be able to operate under identical regulatory conditions in both countries. Statistical evidence supports the role of sandboxes in encouraging innovation.

Reports state that firms that enter the FCA’s sandbox raise more capital, are more likely to survive in the long term, and can better understand how regulatory requirements apply to their innovative services or products.

Readmore: KuCoin Delists Polyhedra’s Token Amid Battle For ‘ZK’ Token Symbol

Benefits of Regulatory Sandboxes for Innovation

More importantly, sandboxes benefit regulators by creating an environment that propels effective and efficient regulations.

A cross-border sandbox could be even more transformative than a domestic one, given the shared commitment of the US and UK to capital markets as the cornerstone of a dynamic economy.

Exploring the potential of tokenization to improve market transparency and reduce operational costs is a forward-looking area for such a sandbox. Commissioner Peirce’s proposal opens up an area for consultation on developing cross-border collaboration to facilitate innovation.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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