Regulators Create Sandboxes as a Place to Foster Fintech

Sandboxes are the hot trend in financial regulation. Or rather, deregulation. China, Singapore, Australia, Canada, and more than 20 other countries have them. U.S. regulatory agencies are starting them. Arizona has one, and other states may follow suit.

Illustration: Josh Freydkis for Bloomberg Businessweek

Sandbox programs are supposed to be a kind of safe space to allow digital entrepreneurs to test products without regulators breathing down their necks. Governments are willing to stay their regulatory hand because the startups that emerge from such experiments might lead to new jobs and expanded access to financial services. They also provide competition to big banks. There’s even a ...