European Crypto Asset Regulation ‘Sandboxes’ Still Lag Despite Upcoming Banking Authority Guidelines
European Regulation Still Lagging
According to Abacus Journal, several states within the European Union have established a regulatory sandbox. Abacus Journal neatly summarized the issues, which are as follows. The states establishing regulatory sandboxes include Denmark, Lithuania, the Netherlands, and the UK; a few other states are expected to join in the coming year. The sandbox has provided hope to the FinTech industry, including digital asset firms.
In 2016, the Financial Conduct Authority in the UK has four cohorts that have been tested. The fifth cohort is going through the application process. Eighty-nine firms are undergoing the testing. A few of the firms include BitX, ZipZap, Oraclize, Soldi, Fineqia, and World Reserve Trust.
States such as Denmark, Lithuania, and the Netherlands have not accepted businesses into testing, yet. Denmark has established the FT Lab and has completed the application process. Only two companies have been accepted, neither which is a digital asset for. As for Lithuania, it has accepted applications for its regulatory sandbox and it is expected to be finalized by next year. Lastly, the Netherlands established its sandbox in 2017, but the country has not released data concerning the fintech firms that have been tested in the sandbox.
Poland is expected to launch its own regulatory sandbox in 2019. The country’s Financial Supervision Authority has chosen eight operators, including BusinessCaddy Foundation for Enterprise Development and PKO Bank Polski. These are not digital asset firms and there is a question as to whether it will do so in the coming year.
Two other EU states are also poised to establish a regulatory sandbox in 2019, including Poland and Spain. Norway’s sandbox will provide for a controlled and secure space for companies to test ideas without having to worry about regulation.
The European Banking Authority is also planning on releasing guidelines for sandbox innovation project. The report will review existing guidelines and then provide recommendations for the design of additional cross-border operations. Regional authorities will issue the guidelines, but there is a still a question on whether digital asset firms will have better access to regulatory sandbox.