SEC Commissioner Esther Pearce has proposed that the Bank of England and the UK Financial Conduct Authority create a “joint cross-border sandbox” to regulate innovation in the field of digital assets.

Hester Peirce said the joint sandbox between the US Securities and Exchange Commission (SEC), the Bank of England (BoE) and the UK Financial Conduct Authority (FCA) will allow regulators in the two countries to obtain more data on how new technologies, related to the development of digital asset market instruments, operate in different legal contexts.

The Commissioner noted that technology companies in the US and UK would also benefit from the creation of a regulated, unified space to update their range of services and benefit from serving markets in two jurisdictions simultaneously.

Thus, the sandbox will allow project participants to evaluate the market reaction to their product or service, and also identify areas for improvement, without compromising investor protection or market integrity.

“Firms could use this opportunity to build a market case for their product and address any design or implementation deficiencies,” says Pearce.

Esther Pierce’s proposal is of a private nature and is an invitation to dialogue addressed to her colleagues in the US and UK, as well as interested members of the public.

The day before, US President Joe Biden vetoed a resolution to repeal the SEC SAB 121 accounting amendment, obliging banks to form a 100% financial reserve for the amount of client crypto-assets they hold.