Austria intends to establish a regulatory sandbox for the fintech industry, Cointelegraph reports.
In the announcement, the minister of Finance in Austria, Hartwig Loeger, explained that he wants to create a regulatory sandbox for businesses around the fintech industry. The regulatory sandbox will be developed by the Financial Conduct Authority (FCA) in the United Kingdom. Additionally, an expert from the FCA will also be involved in the development of the Austrian sandbox.
The FinTech Advisory Council, created last year, will help create the relevant rules to govern the “young financial market around digitized financial services.” These rules will also cater to initial coin offerings (ICOs) and digital currencies to facilitate their growth.
Austria’s regulatory sandbox is aimed at creating an environment that can enable companies to test and train their business models for a limited period. This will be done under the supervision of the FMA. Authorities believe the regulatory sandbox will be a balanced approach that, will ensures the necessary supervisory oversight while at the same time encouraging innovation and growth.
Hubert Fuchs, the State Secretary, said:
“For some companies in the fintech industry, it is particularly difficult to keep track of all regulatory requirements and developments right from the start. Many of them give up and discard their business models. We want to take countermeasures against this.”
Companies who will wish to participate in the sandbox will have to fulfill some requirements. These include the development of a business model based on information, communication, or blockchain technology, among others.
“The digitization of the financial services sector is one of the most crucial areas for the future of Austria. In the future, fintechs will be able to test their innovative business models in a sandbox. The innovation location Austria will be even more attractive,”
Once a company has been admitted to the sandbox, other regulatory requirements can be applied for separately.
Earlier this month, the Minister for Digital an Economic Affairs, Margarete Schrambock, said she believes regulations are not necessary. Schrambock is of the view that the Austrian government should take time to grow the technology and test it extensively before deciding on regulations.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.