Brazil’s central bank and the country’s National Monetary Council have established operation guidelines for a regulatory sandbox to encourage financial and payments technology innovation.
Regulation from the Banco Central do Brasil and the council provides conditions for the supply of products and services tested under the controlled tests environment within the scope of the National Financial System and the Brazilian Payment System — with an emphasis on security and efficiency within the domestic financial and payment systems.
Financial services and payments providers would be licensed to test for a specific period of time, limited to one year, under regulated controls. The first cycle is scheduled for 2021.
To be considered an innovative project, the bank states, the experiment has to employ technological innovation or promote alternative use of existing technology, while also bringing improvements to the financial industry.
Bloomberg Creative Photos/Bloomberg
In order to be licensed to operate within the bank’s regulatory sandbox environment, the institutions — in addition to carrying out their transactions with integrity, reliability, security and confidentiality — must comply with the regulation on the prevention of money laundering and combat of the financing of terrorism and the handling of complaints of their clients and users.
Because new products or services are subject to specific requirements, the bank will monitor results and, when detected that the participant’s activities may pose excessive risks, it may establish limits and additional criteria.
The bank says its license to participate in the regulatory sandbox does not imply a guarantee that the participant will receive a definitive license from the bank to operate.
Fintech-Insight is dedicated to delivering unbiased and dependable insights into cryptocurrency, finance, trading, and stocks. However, we must clarify that we don't offer financial advice, and we strongly recommend users to perform their own research and due diligence.