The Bank of Uganda (BoU) has launched a regulatory sandbox framework that sets the rules and requirements that allows innovative financial solutions to be tested in a live controlled environment.
The regulatory sandbox will be under the Bank of Uganda (Central Bank of Uganda) oversight and subject to the necessary safeguards, according to an official press release.
SEE ALSO: The Financial Intelligence Authority of Uganda Seeks Cryptocurrency Regulatory Framework from the Government
At the same time, BoU has published the Oversight Framework for Payment Systems and Payment Services describing the objectives and scope of the oversight, oversight methodology, organization, and staffing for oversight and how the bank manages cross-border relationships.
According to the BoU:
“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.”
– Bank of Uganda
The sandbox is expected to promote the uptake of electronic payments, digital fnancial services, and financial inclusion in general.
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So far, only one company has received approval to test a Quick Response (QR) technology under the sandbox arrangement with the bank inviting more firms to develop and test their financial innovations under the regulatory sandbox.
While there was no mention of testing crypto products in the regulatory sandbox, it is noteworthy that the financial intelligence authority of Uganda (FIA Uganda) recently requested the Ministry of Finance to come up with a framework to help regulate cryptocurrency operations in the country.
This request comes following non-compliance by various crypto operators in the country to register their operations – a call which went out in late 2020.
Other African countries that have implemented a regulatory sandbox so far include:
Read / Download the regulatory sandbox press release here
RECOMMENDED READING: The Central Bank of Ghana Launches a Regulatory and Innovation Sandbox Prioritizing Blockchain Technology
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