Assets in scope of UK Digital Securities Sandbox will not include cryptocurrencies

HM Treasury (HMT) has published responses to a digital securities sandbox consultation launched in July. So far, 19 institutions have expressed interest, and the government remains open to other potential applicants. The five-year "sandbox" will support the relaxation of certain regulations to experiment with security tokenization and DLT market infrastructure. The Bank of England and the Financial Conduct Authority (FCA) will regulate the sandbox. The preliminary consultation said assets in scope would include debt, equities and money market instruments, but not cryptocurrencies. Consultation responses asked for clarification and suggested equity-like instruments such as depositary receipts, UCITS and other funds, gilts and treasury bills, mortgage-backed securities and tokenized commodities.