SEC Commissioner Establishes Safe Place for Digital Securities Trials

Securities and Exchange Commissioner Hester Pearce recently published a letter revealing a cross-border sandboxing scheme between the US and the UK.

Pearce's letter follows a joint proposal by the Bank of England (BOE) and the UK's Financial Conduct Authority (FCA) to create a safe space for blockchain companies in the UK to issue real-world tokenized securities and conduct business without fear of reprisals from state regulators.

At a recent panel at Consensus 2024, Pierce discussed the benefits of cross-border collaboration for tokenized asset exploration. The Cointelegraph's Turner Wright provided this statement from Pierce:

“We can have double the data that comes from those tests. And to do that, what I'm proposing the SEC do is create [a] A sandbox of micro-innovation in the US, which allows people […] To enter, set their own conditions to try something, try it under certain activity ceilings.

Pierce continued, “One of the problems we have is people try to go to the SEC for relief, but you know, you go in, and nothing happens. This will happen. […] Force the SEC's hand a little.

Related: Tokenized asset market on public blockchains could hit $16T – RippleX VP.

SEC Commissioner Outlines Series of Rules Regarding Joint Digital Securities Sandboxing Program Between Proposed Blockchain Companies in US and UK

At the top of her list was establishing “qualifying activities” for testing in the digital securities sandbox, where qualifying activities are derived from public and industry input.

According to Pearce's letter, ceilings and limits on testing activities will be controlled by public opinion and regulatory authorities on both sides of the Atlantic.

The pro-crypto regulator's letter highlighted the benefits of security tokens, including lower transaction costs, increased settlement deadlines and greater transparency for investors and market participants.