SEC Commissioner proposes creating a secure environment for experimenting with digital securities.

Securities and Exchange Commissioner Hester Pierce has proposed a cross-border sandbox program for U.S. and U.K. blockchain companies to experiment with tokenized securities. This comes after the Bank of England (BOE) and the U.K.’s Financial Conduct Authority (FCA) jointly proposed a safe space for blockchain companies in the U.K. to test the real-world implementation of tokenized securities without facing regulatory backlash. Pierce discussed the advantages of cross-border collaboration for exploring tokenized assets during a panel at Consensus 2024. She mentioned that people have faced difficulties in obtaining relief from the SEC, and a sandbox program would help expedite the process. Pierce outlined several requirements for the joint program, including the establishment of eligible activities for experimentation based on public and industry input, as well as ceilings and limits for these activities. The benefits of securities tokenization, such as reduced transaction costs, increased settlement finality, and improved transparency for investors and market participants, were also emphasized in the letter.