Regulatory sandboxes and blockchain innovation

In the UK, the FCA was the first financial service regulator in 2015 to launch a sandbox as part of its “Project Innovate”. Essentially, when policymakers set up a regulatory sandbox, they make it possible for fintech and blockchain start-ups to test their new ideas in a safe space with less strict rules. This usually means getting brief exemptions from some of the rules set by regulators, having regulators closely watch the product and only letting a few real customers use it. The sandbox model also allows companies to work without worrying about getting into hot water for breaking strict rules, which gives them the chance to come up with new ideas and improve their products. Furthermore, it also helps officials learn more about new technologies, make better rules and ensure that new products are safe for customers before they are made more widely available to people. Fintech start-up, Nivaura, used blockchain technology and within the UK FCA sandbox the company could test its blockc…