The Bank of Uganda (BoU) has recently launched a regulatory sandbox framework. These regulations are rules and requirements that enable creative financial solutions to undergo testing within a controlled environment.
A regulatory sandbox framework enables Fintech startups and other innovators in the financial technology space to carry out live experiments in a regulated environment.
This framework will be supervised by the country’s apex bank (Bank of Uganda), and also its oversight as well as getting subjected to the essential safeguards.
The country’s apex bank also published the Oversight Framework for Payment Systems and Payment Services. This publication explains the objective, scope, methodology and general oversight of how the bank will control trans-boundary relationships.
“The Regulatory Sandbox Framework will promote financial services innovation, attract capital, and funding for fintech firms and provide shared learning opportunities for innovators and regulators.”, a statement from the BoU reads
The regulatory sandbox framework is expected to foster the adoption of digital financial services and inclusion, electronic payments.
As of the time of this publication, only one company has obtained licence to carry out a Quick Response (QR) technology controlled with the aid of the sandbox arrangement as the bank will invite more companies to develop and carry out their various financial innovations.
With much emphasis laid on financial services, it is worthy to note that testing on crypto wasn’t mentioned in the regulatory framework. However, the Financial Intelligence Authority of Uganda in recent times had demanded that the country’s Ministry of Finance come up with regulations to control the operations of cryptocurrency.
So far four African countries – Kenya, Ghana, Zimbabwe and South Africa- have implemented a regulatory sandbox framework
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