The UK’s Financial Conduct Authority (FCA) will introduce a Digital Sandbox to support technology firms during their early product development stages.
The initiative will be permanently available from August 1 and will support emerging technologies such as blockchain in the financial sector.
FCA introduces permanent digital sandbox
The Digital Sandbox, serving as a testing ground, provides crucial support to firms in their initial product development stages, facilitating experimentation through proof of concepts.
Besides innovators, data providers are now invited to seek listing on the permanent sandbox, granting them access to valuable traffic and insights on data usage.
Until now, the platform had only been accessible temporarily for participants engaged in pilots and TechSprints.
This announcement mirrors the release of the Sandbox in Europe. In a July 3 release, the announcement was made that after receiving close to 90 applications in April, the inaugural set of blockchain use cases entered Europe’s regulatory sandbox.
Initially revealed in 2020, the initiative seeks to address the regulatory divide between European countries and cryptocurrency enterprises. Similarly, introducing the UK’s sandbox has a similar outcome in fostering new development.
Part of UK’s regulatory framework
As part of its regulatory framework on payment stablecoins, the U.K.’s Economic and Finance Ministry initially proposed a “financial market infrastructure sandbox” in April 2022.
In a separate move, HM Treasury initiated a consultation for a digital securities sandbox, potentially including crypto products, in July.
Although it is too early to say how many use cases will involve cryptocurrencies and related blockchain technologies, John Glen, the Economic Secretary of the Treasury, shared that they wanted to be on the ground floor of cryptocurrency development, this sandbox becoming one way to help them accomplish this.
The announcement also points to another step towards the UK government’s goal of making its jurisdiction a crypto hub.