Yesterday the government announced three sets of blockchain-related legislative plans. Following multiple consultations, it outlined plans for a regulatory sandbox for financial market infrastructures (FMI sandbox) using DLT, explored below. Additionally, it shared its regulatory plans for the stablecoin sector (separate article to follow). Later this year, there will be further consultation regarding legislating for cryptocurrencies. The Treasury has also asked the Law Commission to consider the legal status of Decentralised Autonomous Organisations (DAOs).
In a speech yesterday, John Glen, Economic Secretary to the Treasury, said, “Above all, we want to position the UK as a pro-innovation jurisdiction… which is attractive to inward investment, and to firms who don’t yet have a settled base.”
A year ago, the Treasury mentioned plans for a new FMI DLT sandbox without many details. This will likely primarily cover FMIs looking to issue security tokens and others focused on using blockchain for post-trade clearing and settlement. Yesterday’s paper said the sandbox’s scope would not be limited to blockchain or distributed ledger technology to maintain technology neutrality. It plans for the sandbox to be operational by 2023. That’s around the same time the EU’s sandbox for the DLT pilot regime is expected to launch.
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