What are the advantages of regulatory sandboxes? (Implications of regulatory sandboxes for China’s financial regulatory authorities)

What are the advantages of regulatory sandboxes? Financial technology applications in the innovation field can provide a better environment for the development of blockchain technology. It can not only reduce related transaction costs, but also improve efficiency and save risks. At the same time, regulatory agencies can also use this platform for data sharing and information disclosure, enhancing regulatory transparency.

The advantages of regulatory sandboxes are as follows: 1. Realization of frictionless settlement for cross-border payments; 2. Beneficial for expanding the range of market participants; 3. Promote financing for small and medium-sized enterprises; 4. Help improve the tax system; 5. Better serve the real economy. (Securities Times)

Implications of regulatory sandboxes for China’s financial regulatory authorities

According to financial industry news, the “regulatory sandbox” project initiated by Hangzhou Internet Court and Chengdu Local Financial Supervision and Administration Bureau has recently been approved. In this pilot, the “Blockchain + Big Data Trading Platform,” specifically the supply chain accounts receivable financing service platform based on blockchain technology (referred to as “clearinghouse”), was included as one of the first application scenarios within China’s regulatory sandbox and underwent testing and operation. After successful implementation, it will become the first nationwide-approved application case that achieves functions such as cross-border payment settlement and fund custody for digital assets. The “regulatory sandbox project” provides insights for China’s financial regulatory authorities: “For regulatory agencies, this pilot provides reference for the standardized management of China’s securities market.”