Legacy regulatory solutions to the challenges ushered in by contemporary FinTech developments are often characterised as reactionary, inadequate and ‘too little, too late’. This has become increasingly manifest as the speed of FinTech developments continues its exponential acceleration. Cryptocurrencies and other digital assets, for example, are but a few of the modern innovations in the finance sector. Yet, years after their inception, there remains a want of a universal consensus on what they are for regulatory purposes and how they should be regulated - if at all. As more innovative products and services permeate the financial markets, regulators across the world are pursuing a new ‘collaborative’ model of regulation - the FinTech regulatory sandbox. FinTech developers in these jurisdictions are now presented with a regulatory enclave to work under and with regulator scrutiny and guidance, to develop revolutionary products that are both regulation compliant, commercially viable and socially beneficial. This chapter discusses the potential challenges and advantages towards designing, running and playing within these regulatory sandboxes.
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