Euroclear UK & International (EUI) has informed UK authorities of its intention to participate in the UK’s digital securities sandbox (DSS).
This initiative, led by the Bank of England and the Financial Conduct Authority, explores emerging technologies in digital securities issuance, trading and settlement within a controlled regulatory setting. Participants need to adhere to a temporarily adjusted framework that promotes innovation while ensuring financial stability and market integrity.
Chris Elms, chief executive officer, Euroclear UI, said: “We innovate to bring connections to financial markets, and by participating in the DSS, we believe we can make a connection between the markets of the present and the digital and data-enabled markets of the future.
“We recognise the potential of DLT to transform securities transactions and this work dovetails with the Government’s overall strategy to advance digital infrastructure across financial markets.”
The DSS aims to encourage innovation by promotion the development of secure and efficient financial systems. It also seeks to maintain financial stability by ensuring that the expansion of digital financial activities does not introduce systemic risks. At the same time, it aims to uphold the integrity as well as the transparency of UK financial markets.
Elms added: “As the central depository for the UK’s securities issuance, we look forward to continuing to bring the world-class, institutional-grade infrastructure commensurate with the systemic importance of these markets to the UK economy.”
Euroclear said it has already facilitated digital ledger-based securities issuance through its D-FMI platform, including the issuance of a €100 million digital native note by the World Bank and a $500 million programme with the Asian Infrastructure Investment Bank.
By taking part in the DSS, EUI aims to support the evolution of digital financial infrastructure in the UK. As the country’s central securities depository (CSD), EUI plays a key role in market operations, settling nearly £1 trillion in transactions daily and holding approximately £5 trillion of the £40 trillion in assets under custody within the Euroclear Group.
Jorgen Ouaknine, group head of innovation and digital assets, Euroclear, said: “Our work in the UK will leverage the Euroclear Group’s capabilities and international expertise, including in the issuance, distribution and settlement of digital assets under English securities law.”
Ouaknine added: “The UK’s international financial centre is of strategic important to Euroclear and our global clients – building the next generation of resilient and efficient market infrastructure in London is a strategic imperative.”