Wed, April 03, 2024 at 15:12

• 

  Kang-hoon

  • Hello Annie.

  • Today's news is about the Bank of England (BoE) and the Financial Conduct Authority (FCA) announcing plans for a Digital Securities Sandbox (DSS).

  • This will allow firms to use distributed ledger technology and other developments to issue shares and bonds.

  • 
• Annie

  • Oh, that sounds interesting!😊 So, what exactly is this Digital Securities Sandbox?

  
• 

  Kang-hoon

  • The DSS is a platform where financial firms can test and operate blockchain technology for issuing, trading, and settling securities.

  • It's part of an effort to increase adoption of blockchain technology among traditional finance firms.

• Annie

  • That sounds like a big step forward for blockchain technology.

  • But how long will this DSS last?

  
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• 

  Kang-hoon

  • The DSS will last for five years.

  • This period will help regulators design a permanent technology-friendly regime for the securities market.

• Annie

  • Wow, five years!

  • That's quite a commitment.👍 And what are the benefits for the firms using this DSS?

  
• 

  Kang-hoon

  • Firms can leverage the DSS to create new business models or combine previous activities for efficiency.

  • The Bank of England aims to facilitate innovation while creating a safe and sustainable system, protecting stability and integrity in the financial market.

• Annie

  • That sounds promising!

  • But are there any limitations to what can be issued through the DSS?

  
• 

  Kang-hoon

  • Yes, there are.

  • The issuance of derivative contracts and crypto assets like Bitcoin are not under the scope of the DSS.

• Annie

  • I see...

  • So, how can other financial market participants interact with the firms inside the DSS?

  
• 

  Kang-hoon

  • The intention of the Bank and the FCA is that financial market participants should be able to interact with the firms inside the DSS as normal while benefitting from the new technology.

• Annie

  • That's great!

  • So, is this good news or bad news for the market?

  
• 

  Kang-hoon

  • In my opinion, this is good news.

  • 

  • It shows that regulatory authorities are embracing technological advancements in finance.

  • This could lead to increased efficiency and innovation in the securities market.

  • Upon comprehensive consideration, this news is perceived as a 😍Bullish.