The Bank of Ghana (BoG) has announced the launch of its regulatory and innovation sandbox, developed in collaboration with EMTECH Solutions, a software services firm that targets central banks.
In a press release, the Bank of Ghana indicated that the sandbox will serve as an enabling framework for small-scale, live testing of innovations by innovators. The innovations will operate under what is described as a special exemption, allowance, or other limited, time-bound exception, in a controlled environment under the regulator’s supervision.
The sandbox aims primarily at fostering a deeper understanding of innovative products, services, and business models by the regulator. This will allow for potential improvements to legal and regulatory requirements, making them more inclusive of emerging technologies, and ensuring careful monitoring and containment of any risks that may emerge.
The sandbox launch follows a successful pilot which included a Ghanaian blockchain Financial Service Provider (FSP) that was tested using Emtech’s platform. EMTECH’s open platform digitizes access to central banking services starting with the digital regulatory sandbox and regulatory reporting APIs.
The apex bank, which continues to test a CBDC, said blockchain appears to hold significant promise for use in mainstreaming financial service delivery though the technology is yet to mature.
Bank of Ghana and other regulators’ EMTECH onboards will leverage the platform to review sandbox applications officially submitted by the FSPs and assess the data submitted via the regulatory reporting APIs. This delivers a modern risk monitoring tool for regulated and yet-to-be-regulated innovations going to market, EMTECH said.
The regulatory sandbox is open to all licensed financial institutions including:
- Specialized deposit-taking institutions
- Payment service providers (PSPs)
- Dedicated electronic money issuers (EMIs)
- Financial holding companies
- Non-bank financial institutions and unlicensed fintech startups that have innovative products and services
- Business models that meet the regulatory sandbox requirements
Innovations eligible for the sandbox environment will have to satisfy any of the following broad categories, as indicated by BoG:
- New digital business models that are not covered explicitly or implicitly under any current regulation
- New and immature digital financial service technology
- Innovative and disruptive digital financial service products that have the potential of addressing a persistent financial inclusion challenge
Interested parties are encouraged to apply on the bank’s website where they are directed to a Bank of Ghana page on the EMTECH platform.
You can check it out here.