Huw Jones

LONDON, (Reuters) – The finance ministry announced Tuesday that Britain would begin testing crypto blockchain technology in live trading activities for the settlement and trade of stock and bond securities next year. This is part of a push to be a “crypto hub” worldwide.

Gwyneth Nursing, director general of financial services at the ministry, stated that distributed ledger technology, which is the backbone for cryptoassets (DLT), should be a priority to make the financial market infrastructure more efficient and innovative for customers.

Nurse, who spoke on behalf of the UK’s regulators for fostering fintech companies, said that Britain will open a “sandbox” for financial market infrastructure testing next year. Sandboxes are environments that allow for real customer projects.

Trading in stocks, bonds or other assets involves traditional three activities, clearing, trading and settlement. DLT can change all this. Financial assets like stocks and bonds could be issued within hours, rather than in days or even weeks.

Nurse stated that “the government may also wish to test whether trading and settlement could be brought together,” at the IDX derivatives conference, London.

“A sandbox allows for the testing of new regulations best practices, and permanent modifications to make sure market users are benefitted.”

Under a new bill on financial services, the sandbox and regulation of stablecoins, cryptocurrencies that are backed by traditional assets, will be implemented.

Reuters was informed last month by industry officials that a digital currency is required to fully reap the benefits of DLT market infrastructure.

Nurse explained that both the Bank of England (Bank of England) and the Finance Ministry are currently examining a digital currency. There will be a public consultation in late 2012, Nurse added.

Nurse explained that the digital pound wouldn’t be made available in the second half the next decade, regardless of whether a decision was taken to proceed with the so-called central banking digital currency or CBDC. Nurse also stated that other central banks are currently looking into it.

The European Union is setting up a sandbox to market and new regulations for crypto markets.

“The EU is making a lot of progress,” said Julia Kolbe, Head of Markets Policy, Government & Regulatory Advocacy at Deutsche Bank (ETR:).