SEC Commissioner Proposes Cross-Border Sandbox for Crypto and Tokenized Assets

Crypto regulation is on the brink of transformation as U.S. and U.K. leaders push to align on digital asset sandboxes that could reignite blockchain innovation and remove compliance roadblocks.

SEC’s Peirce Calls for US-UK Crypto Sandbox Alliance to Unleash Digital Asset Innovation

U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce stated on July 16 at Guildhall in London that the U.S. and U.K. should join forces to create a shared regulatory sandbox for digital assets, enabling cross-border experimentation in blockchain technology. She argued that such cooperation could bring clarity to projects now trapped in ambiguity. The SEC commissioner said:

Market participants are looking to experiment with bitcoin and other crypto assets, stablecoins, non-fungible tokens, digital identity solutions, collateral management, and tokenization of securities and assets such as real estate, among other issues.

Peirce cautioned that many of these innovations have either stalled or failed due to “regulatory hostility” and the absence of a clear path to commercialization.

She proposed a “very flexible US micro-innovation sandbox” that could align with the U.K.’s existing framework, allowing firms to pilot projects under consistent standards. In her vision, these sandboxes would support practical testing while ensuring regulators retain oversight. The aim, Peirce explained, is to provide “a bridge between our current rulebooks and future financial markets.”

The SEC commissioner emphasized that experimentation must remain industry-driven:

Sandbox projects need to be organically generated, not planned by government working groups.

Key to any framework, she added, is ensuring that participation is accessible to both startups and incumbents without artificial limits on user growth or product evolution.

While underscoring the need to protect investors, Peirce rejected politically motivated regulatory conditions, stating: “Extracting conditions unrelated to—and potentially distracting from—the safe and effective functioning of the project would be an improper use of financial regulation to achieve political outcomes.” She concluded that building interoperability early would avoid more costly adjustments later, expressing optimism that the SEC’s Crypto Task Force could coordinate with U.K. regulators to “facilitate experiments” and assess where current rules need revision.