Securities and Exchange Commissioner Commissioner Hester Pierce recently penned a letter advocating for a collaborative program between blockchain companies in the U.S. and U.K. to experiment with tokenized securities. This proposal comes in response to a joint initiative from the Bank of England (BOE) and the U.K.’s Financial Conduct Authority (FCA), which aims to provide a safe environment for blockchain firms in the U.K. to test the real-world implementation of tokenized securities issuance and trading without facing regulatory backlash.
During a panel discussion at Consensus 2024, Pierce elaborated on the advantages of cross-border collaboration for exploring tokenized assets. Cointelegraph’s Turner Wright quoted Pierce as saying, “One issue we have encountered is that people attempt to seek relief from the SEC, but their efforts often go unanswered. This program would push the SEC to take action.”
The SEC Commissioner outlined several requirements for a joint digital securities sandbox program between reputable blockchain firms in the U.S. and U.K. Her first priority was the establishment of “eligible activities” for experimentation in the digital securities sandbox, with these activities being determined based on input from the public and industry.
Additionally, the scope and boundaries of the experimental activities would be determined through public input and overseen by regulatory officials on both sides of the Atlantic, as outlined in Pierce’s letter.
In her letter, the pro-crypto regulator also emphasized the numerous benefits of securities tokenization, including reduced transaction costs, enhanced settlement finality, and improved transparency for investors and market participants.