- Hester Peirce suggests a unified regulatory framework for cross-border testing.
- Sandbox would cover digital securities, RWAs, stablecoins, and DeFi protocols.
- A two-year experimental period aims to reduce barriers while protecting investors.
SEC Commissioner Hester Peirce has proposed a cross-border regulatory sandbox allowing firms to test blockchain-based technologies under unified conditions across the US and UK jurisdictions. The initiative targets digital securities, real-world asset tokenization, stablecoins, and decentralized finance protocols through coordinated regulatory experimentation.
Analyst MartyParty highlighted Peirce’s proposal and noted that crypto innovation is becoming increasingly global in scope. The commissioner first introduced the concept in a May 29, 2024, comment letter to the Bank of England and Financial Conduct Authority, then expanded the framework in a July 16, 2025, speech at London’s Guildhall.
Framework Enables Simultaneous Cross-Border Operations
The proposed sandbox would pair a US “micro-innovation sandbox” with the UK’s Digital Securities Sandbox (DSS). This creates consistent operational rules for participating firms. Companies could test blockchain technologies in both markets simultaneously under harmonized regulatory conditions for up to two years.
Eligible activities would be decided through public input and include tokenization of assets like real estate, stablecoin development, and DeFi protocol testing. Monetary and customer ceilings would limit experimental risks while enabling meaningful innovation testing.
The framework aims to streamline issuance, trading, and settlement processes while maintaining investor protection standards, market integrity, and financial stability across both jurisdictions. Shared regulatory oversight would reduce compliance complexity for firms operating internationally.
Data Sharing Could Accelerate Policy Development
Collaborative experimentation would provide stronger insights into blockchain’s impact than isolated national projects. By pooling results from these joint efforts, regulators could develop more effective policies and regulations.
The proposal responds to increasing calls for regulatory certainty in tokenized asset markets while allowing testing of regulated innovation. Cross-border coordination can avoid regulatory arbitrage while promoting legitimate technological innovation.
Peirce’s proposal recognizes that innovation in digital assets typically crosses multiple countries and must be regulated in cooperation. Conventional means of regulation by country may tie the hands of innovation in international markets.
Innovation Spotlight Aims at Several Asset Classes
The sandbox would allow various blockchain uses like tokenized real estate, corporate shares, and government securities. There would be regulations for developing and testing stablecoins, as long as they stay within some risk limits.
DeFi protocol testing would be improved with clearly written regulations by regulators, supporting developers with confidence and allowing for oversight. Tokenization’s lower costs and greater transparency could benefit investors who would rather use new financial instruments. Such a regulated platform would allow for careful testing before roll-out on the general market.
Related: UK’s FCA to End Retail Ban on Crypto ETNs Beginning October 8
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