There is a growing number of states in the US that are providing regulatory sandboxes for FinTech players. With the introduction of the NC Sandbox Act, North Carolina is the 10th state to launch a regulatory sandbox for innovative FinTech or InsurTech offerings.
The increasing level of innovation in the financial market is ‘forcing’ regulators and supervisors to adapt to the pace of innovation. Unfortunately, traditional lawmaking processes cannot keep up with the changes, making it difficult to implement new solutions. Many industries are facing these obstacles, but FinTech, due to its specific nature, requires a flexible regulatory approach that will balance consumer protection with the development of innovation. One of such tools is a regulatory sandbox.
One of the first regulatory sandboxes was launched in 2015 in the UK. Each year, another country launches its own sandbox programme. They differ in their rules and application, and are designed for time-limited pilot testing of new technologies, services and business models in a secure environment. It is also possible to test services or technologies that are not allowed or illegal in a ‘live’ market.
Sandboxes are designed to make it easier for entrepreneurs to enter the market with a new solution, to allow them to test and refine it before investing significant resources in scaling their offering. Such cooperation is a win-win for entrepreneurs and public administration.
The full article is available at: https://www.natlawreview.com/article/hardly-child-s-play-north-carolina-joins-growing-number-states-fintech-regulatory.