BoE regulatory 'culture shift' could open door to new tech

cyptouser2 months agoCryptocurrencies News70
55966e89>

The Bank of England (BoE) and the Financial Conduct Authority (FCA) are set to take on a “proactive” and flexible regulatory approach through the Digital Securities Sandbox (DSS). According to BoE Executive Director Sashi Mills, this initiative signifies “a cultural shift for regulators.”

At City Week 2024, Mills discussed the financial markets, the role of innovation in maintaining financial stability, and the DSS’s role “to support innovation.” 

“Our attitude to innovation is, therefore, important. This is a cultural shift for regulators, and it means thinking differently.”

The DSS will function under “a more flexible rulebook,” capable of adapting based upon “observations from activity in the DSS.” Mills says this will allow regulators to employ new methodologies, maximize the potential benefits of innovation, and “manage financial stability risks.” 

“Where the fundamental processes are still intact, reactive regulation is still an effective tool to address risks that emerge. But for wholly new innovative approaches, we think it is important to engage proactively in the development phase.”

Mills infers that this “proactive approach” will enable the BoE and the FCA to allow firms to use “developing technologies that would otherwise not be permitted.” This includes using digital ledger technology (DLT) — technology that allows the issuing, trading, and settling of securities — through the DSS.

Related: Bank of England and FCA launch Digital Securities Sandbox for DLT testing

“This will consider new technology and approaches to regulated activities under a flexible, more proportionate rulebook. To maintain wider financial stability and market integrity there will be some limits on activity in the DSS.”

Firms known as Digital Securities Depositories (DSDs) working within the DSS will be limited in the value of securities they are permitted to handle. These limits will be adjusted as firms demonstrate their ability to meet regulatory standards.

Through DLT, the DSS aims to mitigate inefficiencies in “post-trade environments” that Mills says could “lower the barriers to entry for providers” while improving financial market resilience.

Mills’ elaboration on the remit and implications of the DSS follows from FCA executive Matthew Long’s announcement on May 8 that the regulatory body would be combining “the best of traditional finance” and decentralized finance (DeFi).

Magazine: If Bitcoin doubles, Stacks will 4x in 2025: Daan Crypto Trades, X Hall of Flame

The content on this website comes from the Internet. Due to the inconvenience of proofreading the authenticity and accuracy of the copyright or content of some content, it may be temporarily impossible to confirm the authenticity and accuracy of the copyright or content. For copyright issues or other issues caused by this, please Call or email this site. It will be deleted or changed immediately after verification.

related articles

Fetch.ai, SingularityNET, and Ocean Protocol's planned $7.5 billion ASI token to launch in May

The Artificial Superintelligence Alliance (ASI), comprising Fetch.ai (FET), SingluarityNET (AGIX), a...

Groq's $20,000 LPU chip breaks AI performance records to rival GPU-led industry

Groq's $20,000 LPU chip breaks AI performance records to rival GPU-led industry

Groq’s LPU Inference Engine, a dedicated Language Processing Unit, has set a new record in processin...

Biden signs ‘terrifying’ bill giving US agencies more spying power

Biden signs ‘terrifying’ bill giving US agencies more spying power

1205f261˃President Joe Biden has signed off on the controversial bill that expands the surveillance...

Synapse token, TVL slide following major liquidity provider sell-off

Synapse token, TVL slide following major liquidity provider sell-off

Synapse Labs, the main contributor to the cross-chain bridge Synapse (SYN), confirmed that an unname...

Major tech firms acknowledge AI risks in regulatory filings

In a series of recent SEC filings, major technology companies, including Microsoft, Google, Meta, an...

FTX discount sale of $1.9 billion in Solana faces creditor fury

FTX creditors have strongly disapproved of the bankrupt crypto exchange’s decision to sell its Solan...