SEC Commissioner Hester peirce is championing a novel cross-border regulatory sandbox for blockchain innovation.
WASHINGTON – U.S.securities and Exchange Commissioner Hester Peirce has put forth a bold proposal: a unified, cross-border regulatory sandbox designed too allow companies to test blockchain-based technologies under consistent conditions in both U.S. and United Kingdom jurisdictions. This initiative targets digital assets, tokenized real-world assets (RWAs), stablecoins, and decentralized finance (DeFi) protocols, aiming to foster innovation through coordinated regulatory experimentation.
The concept, first detailed in a May 29, 2024, comment letter to the Bank of England and the Financial Conduct authority, was further elaborated in a July 16, 2025, speech in London. Analyst Martyparty highlighted the proposal, noting that crypto innovation is undeniably going global.
Unified rules for simultaneous cross-border testing
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This proposed sandbox mirrors the U.S.”microinnovation sandbox” approach, establishing consistent operational rules for participating companies. Businesses could simultaneously test blockchain technologies in both markets under harmonized regulatory conditions for up to two years. The specific activities allowed would be determined through public input,possibly including tokenized real estate and the development of stablecoins and DeFi protocols. Monetary and customer limits would be in place to manage experimental risks while enabling meaningful innovation testing.
The framework aims to streamline the processes for issuance, trading, and liquidation. Crucially, it seeks to maintain high standards for investor protection, market integrity, and financial stability across both jurisdictions. This shared regulatory oversight could significantly simplify compliance for companies operating internationally.
Data sharing to accelerate policy development
Collaborative experimentation is expected to yield more robust insights into blockchain’s impact than isolated national projects. By consolidating findings from these joint efforts, regulators could develop more effective policies and regulations. This proposal directly addresses the growing demand for regulatory certainty in tokenized asset markets while encouraging innovation within a regulated environment.
cross-border coordination is key to preventing regulatory arbitrage and promoting legitimate technological advancement. peirce’s proposal acknowledges that digital asset innovation naturally transcends national borders, necessitating cooperative regulation. Traditional country-by-country regulatory approaches risk stifling innovation in global markets.
Innovation spotlight targets diverse asset classes
The sandbox could accommodate various blockchain applications, such as tokenized real estate, corporate actions, and governmental securities. Regulations would be developed for the creation and testing of stablecoins, provided they remain within defined risk parameters. Testing DeFi protocols would benefit from clearly defined regulations, offering developers confidence and enabling regulatory supervision.
The potential for lower tokenization costs and increased clarity could significantly benefit investors exploring new financial instruments. A regulated platform of this nature would facilitate careful testing before broader market launches,ultimately benefiting consumers and the financial ecosystem.
