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UK’s FCA to launch a permanent Digital Sandbox on August 1



The U.K. Financial Conduct Authority (FCA) has announced the permanent launch of its Digital Sandbox on 1 August 2023, following two successful pilots. The Sandbox will be accessible to businesses, data providers, startups, as well as entities in banking, investment, lending, and payments.

According to the FCA, the Digital Sandbox serves as a testing environment to support firms in the early stages of product development. Through proof of concepts, experimentation can take place within this environment.

By utilizing a sandbox testing environment, products and services can ensure they do not have any unintended side effects that could impact the real world.

The FCA sees this as a chance for platforms to grow and incorporate a wider range of innovative businesses, start-ups, and data providers.

Furthermore, the Sandbox will enable data providers to apply for listing their data on the platform, gaining traffic and insights into its usage, according to the FCA.

In terms of impact, the Digital Sandbox aims to foster innovation and facilitate growth. The FCA reported that over half of the previous participants from Small to Medium Enterprises in the pilots and TechSprints experienced positive developments, such as launching new products, securing funding and partnerships, or receiving industry awards or recognition.

However, prior to this announcement, FCA’s Digital Sandbox platform had only been temporarily accessible to participants involved in pilots and TechSprints.

In addition, the U.K.’s Economic and Finance Ministry mentioned a “financial market infrastructure sandbox” in April 2022, along with plans to regulate payment stablecoins. The ministry also initiated a consultation for a digital securities sandbox.

Furthermore, on July 3, the European Commission revealed that 20 projects, spanning finance, capital markets, global trade, and more, had been chosen for participation in a European Union regulatory sandbox.

Effective August 1st, projects centered around the specified theme will have the opportunity to apply for the Permanent Digital Sandbox. The assessment process will consider criteria such as scope, genuine innovation, consumer benefit, readiness, and need for support. According to the FCA, the approval process will be completed within a maximum of 4 weeks.

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