Regulatory sandboxes have attracted significant attention for their potential to empower financial regulators struggling with fast-paced innovation. Through a sandbox, regulators can carefully monitor digital products, services and business models in a live testing environment, enabling firms to bring innovations to market more quickly and readily. But when and under what circumstance sandboxes are the most appropriate tool for emerging market regulators to respond to the wave of digital technologies that are disrupting the financial sector?
This guide leads regulators step by step through the decision-making process, including the alternatives to first consider. It then examines the design and implementation factors for creating a successful sandbox environment.