In a recent report, the FCA (Federal Conduct Authority) of the United Kingdom revealed its intentions to launch a new cryptocurrency soundbox that would house a new set of laws aimed at regulating digital securities. According to Helen Boyd, the chief of capital markets at FCA, the Treasury Department of the United Kingdom plans to launch the 2nd Digital Securities Sandbox in the first quarter of next year.
Furthermore, the report showed that the news about the upcoming sandbox surfaced about two months after the FCA deployed the first Sandbox for cryptocurrency in the country on August 1. According to the report, the first Sandbox the agency initially dropped features the data sets and ideas aimed at facilitating innovation and growth as well as promoting global competitiveness for tech firms.
Furthermore, Helen Boyd stated at the recently concluded CCData Digital Asset Summit that in order to improve the adoption rates of digital securities, it would be introducing another Sandbox by 2024. However, the chief pointed out that even though the Federal Conduct Authority is independent, it controls innovation under the ultimate oversight of the United Kingdom Treasury Department.
New UK Sandbox To Promote Innovation
In addition, Boyd highlighted that the next Digital Securities Sandbox would be different from the one that is currently active because it would be designed to enhance the adoption and testing of virtual securities in all financial markets of the country. Also, the announcement added that the Sandbox would enable firms and businesses to establish financial market facilities leveraging the potential of digital asset innovation.
In addition, Boyd said the financial market facilities that would be created can be used for several activities related to virtual securities. Nonetheless, the chief emphasized that the financial products obtained from the process would be temporarily exposed to amended regulatory and legislative frameworks. Moreover, the forthcoming Sandbox would promote technology innovations in the country through its regulations, encouraging the adoption and use of digital securities. The reports also showed that the proposed Sandbox would be the first to be launched under the authorization of the 2023 Financial Services and Markets Acts.
FCA Aims To Regulate The UK Crypto Markets
In the announcement, Helen Boyd highlighted that the United Kingdom’s Financial Conduct Authority aims to become the leading cryptocurrency regulatory body in the country. At the moment, the government agency anticipates the UK Treasury Department’s verdict on the distribution of power to know how much authority it holds on the crypto industry in the country, according to the report.
Prior to the announcement, the FCA had reportedly launched a public consultation, encouraging experts’ and businesses’ opinions on the potential Digital Securities Sandbox it plans to launch. According to the report, the agency executed the open consultation between July 10 and August 22 this year.
Notably, the news of the upcoming DSS surfaced when the United Kingdom was enforcing a strict regulatory approach to regulate the cryptocurrency industry. According to reports, the United Kingdom Treasury plans to implement a blanket ban on crypto cold calls.
UK Frowns At Increasing Financial Crime Rate
In alignment with its plans, the Treasury Department reportedly published a consultation paper to evaluate the implications of banning cold calls related to financial services. In the paper, the department sought evidence and real-time cases to adequately examine the complete and accurate impact the ban would have on businesses and the cost of the proposed ban.
Meanwhile, the rate of fraud related to financial products’ cold calls, which are aimed at victimizing unsuspecting investors is rapidly increasing in the country. According to recent statistics released by the National Crime Agency, about $8.7 billion is lost in the UK financial markets due to fraudulent activities.
In addition, the economic secretary of the UK Treasury, Andrew Griffith, pointed out in the consultation paper that the criminal activities related to cold calls for financial services and products are increasing at an alarming rate, which the government frowns at and would not tolerate. Additionally, the UK government reportedly launched a new strategy to curb fraud, which includes about 400 new jobs related to police intelligence, on May 3, 2023.
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