South Korea’s financial regulator has announced nine new firms to be included in its latest regulatory sandbox cohort, including firms specializing in blockchain and related technologies.
The Financial Services Commission (FSC), which is responsible for overseeing financial services regulation in the country, announced the companies, which will benefit from a relaxed compliance regime for the duration of the program.
According to the regulator, the sandbox is designed to allow companies to innovate and develop new products, without having to meet the same compliance standard as non-sandbox operators. The FSC hopes the program will encourage firms with commercial potential by providing a more suitable regulatory environment for testing new products and technologies on consumers, whilst still operating in a live environment.
The program, which was launched in January 2018, allows firms up to four years in the sandbox, and the lack of regulatory restrictions makes winning approval a significant advantage for blockchain companies.
The regulator said some 105 companies had applied to take part in the program since its launch, and the news that blockchain firms are included within the cohort is another vote of confidence in the huge commercial potential of blockchain. As of May 2, 18 services have already been approved to be tested in the financial regulatory sandbox, according to the FSC.
The specific companies included have not yet been specified, though further announcements are expected in the coming days.
Regulatory sandbox schemes have become increasingly common, with regulators in jurisdictions worldwide choosing to use a similar, relaxed regulatory environment for blockchain startups.
The news from South Korea comes just days after the U.K. Financial Conduct Authority (FCA) announced the companies named in its latest regulatory sandbox cohort, where blockchain companies were again overrepresented.
Among them, ecommerce payments firm Nuggets and Diro Labs, “an identity verification service that can verify any person or document online directly from the original source”, were amongst the blockchain companies to win their place in the sandbox program.
During the sandbox period, the Financial Services Commission will work closely with firms to determine the legal boundaries of their testing, while ensuring the firms have room to innovate freely in developing their products.
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