The regime will provide flexibility for eligible firms to experiment with DLT-based trading facilities and settlement systems for financial instruments, including the option of operating a combined trading and settlement facility. There are limitations to consider, however, including uncertainty as to whether infrastructure developed under the regime will be permitted to live on long-term. Meanwhile, the UK is working on developing its own financial market infrastructure sandbox.
The regime is effectively a regulatory sandbox. Broadly, the idea is to facilitate the development of secondary market infrastructure for digital securities (including both tokenised securities and digitally native securities), and to help inform EU regulators as to what (if any) permanent changes to the regulatory framework would be beneficial.
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