From childish things: the evolving sandbox approach in the EU's regulation of financial technology. Issue 1 (2nd January 2023)

• Record Type: Journal Article
• Authors: McCarthy, Jonathan
• Is Part Of: Law, innovation and technology. Volume 15:Issue 1(2023)
• Page Start: 1
• Page End: 24
• Publication Date: 2023-01-02
• Subjects: Regulatory sandboxes -- FinTech -- artificial intelligence -- distributed ledger technology -- EU; Technological innovations -- Law and legislation -- Periodicals; Intellectual property -- Periodicals; 338.064
• DOI: 10.1080/17579961.2023.2184131
• Languages: English
• ISSNs: 1757-997X

Abstract

ABSTRACT: The background to this article is the seeming revival of a sandbox approach to FinTech regulation within the EU, as epitomised by legislative initiatives on AI and DLT. The article contributes to existing literature on the topic by highlighting how the current design of sandboxes is not being informed by sufficiently comprehensive empirical evidence from international examples. As well as examining relevant provisions of the European Commission's proposals on AI sandboxes and introduction of a DLT pilot regime, the article refers to UK and Australian examples to demonstrate the varying features of sandboxes. Even if there is continued ambiguity as to the characteristics of sandboxes, broader regulatory supports, such as innovation hubs, can be vital. However, this should not diminish the need for improved clarity and transparency on sandboxes' operations. The ability to make necessary refinements will determine how the EU's regulatory approach to FinTech generally will evolve.