Austria Eyes Setting Up Fintech Regulatory Sandbox
Austria’s Finance Ministry is contemplating setting up a regulatory sandbox for the financial technology sector. Finance Minister Hartwig Loeger said the FinTech Advisory Council — established by the Ministry of Finance in 2018 — will help build appropriate rules to propel the “young financial market around digitized financial services,” such as initial coin offerings (ICOs) and digital currencies, to encourage their growth.
Regarding the need for such a regulatory sandbox, State Secretary Hubert Fuchs said
“For some companies in the fintech industry, it is particularly difficult to keep track of all regulatory requirements and developments right from the start. Many of them give up and discard their business models. We want to take countermeasures against this.”
In the regulatory sandbox, under FMA supervision, fintech firms are meant to be able to trial and tutor their business strategies for a fixed period of time. The press release relates to the idea of a regulatory sandbox created by the Financial Conduct Authority (FCA) in the United Kingdom, thus revealing that an FCA specialist also participated in creating the Austrian sandbox.
To turn into a sandbox participant, firms will have to meet certain criteria, including the advancement of data, interaction, or blockchain-based business model.
Elaborating on the benefits of sandbox, Loeger stated that “the digitization of the financial services sector is one of the most crucial areas for the future of Austria. In the future, fintechs will be able to test their innovative business models in a sandbox.”
Moscow and three other Russian provinces will trial the use of cryptocurrencies and blockchain technology in legislative sandboxes. Bahrain’s central bank disclosed plans to start a legislative sandbox in February to permit blockchain and crypto firms to operate in the country pending standardized legislation. The effort allegedly allows businesses “to test their solution on a limited number of users, with a limited number of transactions.”