By the end of Q1, the British Treasury is expecting to launch a Digital Securities Sandbox next year, according to Helen Boyd, head of capital markets at the independent regulatory watchdog, the Financial Conduct Authority.
A sandbox is a testing environment for those seeking to bring innovative products to the market. The FCA has a similar engagement via its Regulatory Sandbox, where firms with viable products can begin pitching them to a closed circle of early customers.
When asked by the host to explain what the role of the FCA will be in regulating crypto, Boyd explained that the FCA gets its powers from HM Treasury-the UK's Finance Ministry.
The FCA will then be in a position to take forward those new powers and work out what the regulatory framework is that we will be writing the rules for. She added the FCA hopes to field 'a great deal' of comments from the industry.
Earlier this summer, the FCA said that crypto companies advertising in the UK must have until October 8 to comply with the regulatory authority's current financial promotion regime. To get approved, all companies must apply and pay a fee.
The government is not just targeting local crypto firms, either. It said if a company's marketing scheme reaches or influences British customers in any way, it will fall under the FCA's purview.
There are four ways for legally communicating crypto ads to UK customers, all of which require approval from an FCA-regulated body.
The FCA says failure to comply can result in two years' imprisonment, a fine, or both.
Helen Boyd said that some firms running late for registration may be able to get an extension.