In November 2015, the FCA (Financial Conduct Authority) initially proposed the idea of Regulatory Sandbox. As a secure test zone under supervision with restrictive conditions and risk management measures, the Regulatory Sandbox allows enterprises to test their innovative products, services and business models in real market environment with real individuals and corporate users. This will help reducing the time and potential cost of bringing innovative ideas to market, as well as the regulatory uncertainty.
In January 2019, China’s State Council has approved the proposal to explore the Regulatory Sandbox in Beijing under the premise of legal compliance. In December 2019, the People’s Bank of China approved Beijing to take the lead in carrying out the national fintech innovation regulation as a pilot, to explore the Chinese version of the “regulatory sandbox” that meets China’s national conditions and international standards, to guide financial licensees to use modern information technologies to facilitate the quality and efficiency of finance under the premise of legal compliance and protection of consumer rights, creating an environment for the development of fintech innovation that is righteous, safe, inclusive and open.
Blockchain is a network technology involving financial innovation, and many authorities worldwide are trying to establish the Regulatory Sandbox for blockchain.