By Hu Jones
LONDON (Reuters) – The UK will begin testing blockchain technology for traditional market operations such as stock and bond trading and settlement next year as part of its efforts to become a global “digital asset hub”, the finance ministry said on Tuesday. .
Gwyneth Nurse, director general of financial services at the ministry, said the use of distributed ledger technology (DLT) that supports cryptocurrencies is a top priority to make the financial market infrastructure more innovative and efficient for users.
The nurse said the ministry would launch a financial market infrastructure “sandbox” next year to test DLT projects under the control of regulators, a pioneer for UK regulators to grow Fintech companies. Sandbox is a testing ground for projects that involve real customers.
Trading in financial markets, stocks, securities and other assets traditionally involves three distinct functions of trading, settlement and settlement. Using DLT can change that and allow you to issue financial assets such as bonds or stocks in hours instead of days or weeks.
Speaking at the annual IDX Derivatives Conference in London, the nurse said, “The government may want to test how trade and settlement can be linked.
“Sandbox New Regulation will allow you to test best practices and make permanent changes to ensure that market users benefit.”
Under the new Financial Services Bill, which will be introduced in Parliament this year, the sandbox will be introduced with regulation for cryptocurrencies – staple coins supported by traditional assets.
The nurse said the Ministry of Finance and the Bank of England are working together to evaluate Digital Libra with a new public consultation later this year.
But digital scales will not be available until the second half of the next decade, even if the central bank decides to move forward with what is known as the digital currency or CBDC – other central banks are looking at this as well, the nurse said. .
The European Union is finalizing new rules for its own sandbox and cryptocurrency markets.
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