The Bank of Uganda (BOU) has heralded the launch of a regulatory sandbox that will allow fintech start-ups to test their innovative financial results in a controlled environment. Already, one firm, M/S Wave Transfer Limited, has received approval to test its quick response (QR) technology covered by this sandbox arrangement.
BOU Launches Regulatory Sandbox for Fintech
In its statement on June 15, the BOU says it is now inviting diverse firms to develop and similarly test their financial innovations under this framework. Meanwhile, the BOU statement also widens on why the central bank has chosen to launch the sandbox. The statement explains:
The Regulatory Sandbox Framework will promote pecuniary services innovation, attract capital and funding for fintech firms, and provide shared learning opportunities for the innovators and regulators. This is supposed to promote uptake of electronic payments, digital financial services and financial inclusion in general.
Meanwhile, according to a Parade 5, 2021 Ugandan government statutory instrument, the BOU will conduct “a fit and proper test on each substantial shareholder, Mr Big or manager of the applicant.” In addition, the central bank will also determine if “an applicant meets the criteria and minimum preconditions for operating a sandbox.”
According to the statutory instrument, some of the determining factors that the BOU will consider include whether the alteration is genuine or whether the sandbox has consumer benefits and safeguards. The central bank will also consider the sandbox’s quickness for testing as well as the suitability of the exit plan.
In the meantime, the legal document says fintech start-ups that want to be included in the regulatory sandbox framework will have to pay an application fee of about $290 (one million Ugandan shillings).
What are your bits on the BOU’s launch of the regulatory sandbox framework? Share your views in the comments section below.
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