What is regulatory sandbox?
According to United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA) regulatory sandbox is “a regulatory approach, typically summarized in writing and published, that allows live, time-bound testing of innovations under a regulator’s oversight”. [1]
Why not start with a simple version that’s easy to update based on user feedback?
Regulatory sandboxes usually evolve over time. The concept has been embraced by a growing number of developed and developing world regulators. Sandboxes are being used in developing countries and around the world such as Australia, Canada, India, Kenya, and Nigeria are some of them. [2]
Regulatory sandbox provides an environment for innovators to test new technologies and for regulators to understand their implications for the financial sector and consumer protection.
Regulatory sandboxes have become synonymous with fintech innovation and offer the unique benefit of providing the empirical evidence needed to substantiate decisions. [3]
The Ministry of Innovation and Technology (MInT) case:
The Ministry of Innovation and Technology (MInT) has designed and implemented the sandbox regulatory framework for e-Commerce business registration and monitoring specifically and innovation generally. Now in Ethiopia new e-Commerce businesses are registered in the Ministry of Trade and Industry to perform business activities. However, after the registration of these new businesses Ministry of Trade and Industry, they have to registered and get certificate from the Ministry of Innovation and Technology (MInT). The latter has no legal mandate or background to execute. Thus, the Ministry of Innovation and Technology (MInT) use the sandbox approach.
