UK Launches Support for Crypto Startups with “mini-budget” Announcement

The UK has announced new legislation that will provide support for the crypto sector in the country. UK Chancellor of the Exchequer Jeremy Hunt outlined 110 measures for growing the nation’s economy in a mini-budget announcement which includes plans to boost the digital assets sector.

Central to the plans is to pass legislation to implement the Digital Securities Sandbox (DSS), which aims to facilitate the adoption of digital assets across financial markets. 

“The government will lay a statutory instrument to implement the Digital Securities Sandbox, delivering on the Edinburgh Reform announcement to implement a Financial Market Infrastructure Sandbox in 2023,” the budget statement said

The initiative will begin in the first quarter of 2024, and the government plans to publish its response to a consultation on the DSS that was launched in July. 

Commenting on the initiative, Zodia Markets General Counsel Dina White.said that the DSS is an important development in the evolution of the securities industry.

“We are seeing a continual progression of digitalization across a range of financial instruments, and this represents a critical step in the adoption of new technologies as they are applied to traditional financial assets,” White told The Block.

Indeed, the UK has done much to foster the growth of the crypto industry. From formulating friendly regulation to outrightly creating legislation to boost the industry’s growth, the country is one of the most pro crypto countries in the world currently.

An Improvement

The UK government already has a Digital Sandbox launched by the Financial Conduct Authority (FCA) in August and is currently functioning. However, the upcoming Digital Securities Sandbox will be different.

While the SEC FCA’s Digital Sandbox aims to support firms in the early stages of digital product development,FCA Head of Capital Markets Helen Boyd in a speech at the CCData Digital Assets Summit in October said the DSS will have “a new rule set that would allow it to do new things with digital securities.”

Ensuring Wider Use of Crypto Technology

The crypto industry is facing resistance in many countries, particularly in America. As a result, it is difficult for mainstream organizations to  adopt crypto technology in every aspect of their businesses. This is about to change in the UK.

According to White, the sandbox will allow firms to use digital asset technology to establish and operate critical financial market infrastructure, such as central securities depositories or trading venues.

“It will also allow for a wide range of assets to interact with wider financial market activities, such as being used as collateral, or as part of repo transactions. Given that these will include both ‘digitally native’ securities and digital representations of traditional instruments, this represents an exciting time for experimentation in a well-established industry,” White added.

The UK’s DSS consultation paper confirms this, stating that companies have an opportunity “to set up financial market infrastructures that utilize digital asset technology, which can perform a number of activities in relation to digital securities under a temporarily modified legislative and regulatory framework.”

Ultimately, the UK government seeks to bring digital asset technology into mainstream adoption and use. Regulators recently proposed bringing stablecoins – a group of cryptocurrencies with less volatility – into the mainstream payment system in the country, making it a legal means of digital payment.

The post UK Launches Support for Crypto Startups with “mini-budget” Announcement  first appeared on CryptocyNews.com.

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