The sandbox is designed to support company’s innovations and ideas around digital assets and how they can be applied within the traditional financial services infrastructure.

The service, which has been formed on the back of a consultation process launched by the BoE and FCA, also provides a means for testing legislative changes around digital securities and how they may affect the market.

"We encourage firms that are innovating in financial market infrastructure to apply and have published guidance to help them," stated the BoE and FCA in a joint announcement.

Firms can even arrange pre-application meeting with the regulators in order to better understand the requirements, according to the announcement.

"The DSS will allow participants to use developing technologies, such as distributed ledger technology (DLT), to undertake the activities traditionally associated with Central Securities Depositories and trading venues," stated the FCA.

"Firms will be able to explore the benefits of these new technologies and practices in traditional financial markets. We’ll work together with the Bank to operate the DSS, which will have 3 overarching aims - facilitating innovation to promote a safe, sustainable, and efficient financial system; protecting financial stability; protecting market integrity and cleanliness."