SEC’s Hester Peirce Advocates for Cross-Border Crypto Sandbox Between US and UK Jurisdictions

• Hester Peirce advocates for a joint sandbox initiative between the US and UK to enhance regulatory learning and innovation.
• The proposal aims to leverage the digital securities sandbox (DSS) to benefit investors, market participants, and regulators.
• Peirce believes that such a sandbox would provide consumers and investors access to innovative products and services.

Hester Peirce’s proposal for a cross-border regulatory sandbox could revolutionize crypto regulation, fostering innovation and market transparency.

Peirce Wants Firms To Conduct Same Sandbox Activities

Republican Commissioner at the US Securities and Exchange Commission, Hester Peirce, popularly known as “Crypto Mom,” has advocated for a cross-border sandbox between the United States and the United Kingdom. This initiative aims to leverage the digital securities sandbox (DSS) to serve investors, market participants, and regulators.

The letter outlines a straightforward approach to implementing a cross-border sandbox, suggesting that the DSS be open to US-domiciled firms. Peirce emphasizes the need for an information-sharing agreement between the two nations, arguing that expanded eligibility would foster cross-border innovation.

Benefits of a Cross-Border Sandbox

Peirce’s proposal highlights several benefits of a cross-border sandbox:

• Facilitates innovation in highly regulated sectors.
• Allows innovators to test their innovations under real-world conditions.
• Creates an environment conducive to effective and efficient regulations.
• Provides a manageable entry point into highly regulated markets.
• Gives consumers and investors access to products and services that might not otherwise be available.

Incorporating Innovation Into Financial System Via Shared Sandbox

The sandbox generates real-world insights on Distributed Ledger Technology (DLT), determining whether it could streamline the issuance, trading, and settlement of securities. At the same time, it safeguards investors and upholds market integrity and financial stability.

Peirce argues that having similar regulatory requirements in the US and the UK would promote market transparency. Firms would have to adhere to reasonable conditions but reserve the right to choose regulatory systems that best serve investors and markets. This approach would maximize their longer-term success with the Commission.

Conclusion

Hester Peirce’s proposal for a cross-border sandbox between the US and UK presents a promising avenue for fostering innovation and market transparency. By leveraging the digital securities sandbox, both nations can benefit from shared regulatory insights and enhanced market practices. This initiative could pave the way for more collaborative and efficient financial regulations, ultimately benefiting consumers, investors, and market participants.