Sasha Mills, executive director of Financial Market Infrastructure at the Bank of England (BoE), gave a speech on the UK’s Digital Securities Sandbox (DSS) at City Week 2024 in London. Mills emphasised the need to “foster innovation’s safe coexistence with the old” while maintaining financial stability.

Mills pointed out during her speech that the inefficiencies in current post-trade processes, describing them as “time-consuming, costly, and operationally risky.” She noted that the DSS aims to integrate cutting-edge technologies, such as distributed ledger technology (DLT), which could “streamline processes and introduce more liquidity to a wider range of financial assets.”

Highlighting the Bank’s proactive regulatory stance, Mills stated, “Our attitude to innovation is important. This is a ‘cultural shift’ for regulators.” The DSS will allow firms to experiment with new technologies in a live environment, providing a flexible regulatory framework. “The sandbox approach has the benefit of allowing us to employ a more flexible rulebook,” she said, ensuring that new entrants and startups can innovate without the burden of traditional regulatory constraints.

PostTrade 360 Nordic 2024

Digital Securities Depositories

Financial stability remains a key concern. Mills assured that firms will face rigorous standards to ensure their systems are robust before they can fully operate within the DSS. “To protect financial stability, firms will have to demonstrate to regulators that their systems can support live activity in the DSS,” she explained. Firms meeting these standards will operate as Digital Securities Depositories (DSDs), with activities closely monitored and gradually expanded.

“The DSS is designed to enable DSDs to graduate to a new regulatory regime if they meet the relevant standards,” Mills said, highlighting the Bank’s commitment to balancing innovation with market integrity.


The BoE and the Financial Conduct Authority (FCA) are currently consulting on the operation of the DSS. The consultation is open until 29 May, and Mills encouraged industry feedback to refine this pioneering initiative.