The Bank of Uganda (BOU) has announced the introduction of a regulatory sandbox that will allow fintech startups to test their innovative financial solutions in a controlled environment. One company, M / S Wave Transfer Limited, has already received approval to test its Quick Response (QR) technology under this sandbox agreement.
BOU introduces regulatory sandbox for fintech
In its June 15 statement, the BOU says it is now inviting more companies to develop and test their financial innovations in this context. In the meantime, the BOU declaration also explains why the central bank decided to introduce the sandbox. The statement explains:
The Regulatory Sandbox Framework will drive innovation in financial services, attract capital and funding for fintech companies, and provide shared learning opportunities for innovators and regulators. This is intended to promote the adoption of electronic payments, digital financial services, and financial inclusion in general.
In the meantime, in accordance with an ordinance of the Ugandan government dated March 5, 2021, the BOU will “conduct an aptitude test for each material shareholder, director or manager of the applicant”. In addition, the central bank will also determine whether “an applicant meets the criteria and minimum requirements for running a sandbox”.
Decisive factors that the BOU will consider under the ordinance include whether the innovation is genuine or whether the sandbox offers consumer benefits and guarantees. The central bank will also review the readiness of the sandbox to test and the suitability of the exit plan.
Meanwhile, the legal document states that fintech startups wishing to be included in the regulatory sandbox framework will have to pay an application fee of around $ 290 (one million Ugandan shillings).
What do you think of the introduction of the regulatory sandbox framework by the BOU? Do share your views in the comments section below.
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