The
U.K.
has
introduced
a
new
regulation
that
will
allow
the
country’s
financial
watchdogs
to
run
a
sandbox
for
tokenized
securities,
according
to
a
Monday
publication.
Sandboxes
let
companies
test
new
solutions
and
products
under
regulatory
supervision.
With
the
new
regulation
–
which
will
take
effect
on
Jan.
8
–
the
Financial
Conduct
Authority
(FCA)
and
the
Bank
of
England
will
be
able
to
operate
the
Digital
Securities
Sandbox
(DSS),
announced
earlier
this
year.
Businesses
will
also
get
to
test
distributed
ledger
technology
that
powers
crypto
to
digitize
or
tokenize
traditional
securities.
Tokenization
of
real
assets
is
all
the
rage
among
financial
institutions
worldwide,
and
U.K.
regulators
are
trying
to
figure
out
how
best
to
regulate
them.
Participating
in
the
DSS
will
subject
companies
to
modified
rules
in
case
current
ones
act
as
barriers,
a
document
explaining
the
law
said.
The
regulators
themselves
will
be
able
to
test
out
things
and
make
rule
changes
to
accommodate
developing
technologies.
The
U.K.
is
not
wasting
time
using
its
new
powers
under
the
recently
passed
Financial
Services
and
Markets
Act
2023
to
establish
how
it
wants
to
regulate
the
crypto
sector.
The
DSS
regulation
is
a
by-product
of
the
Act.