A regulatory sandbox is a supervised testing environment in which firms can trial innovative products, services, or business models with real customers under temporary regulatory relief and close oversight. It lets regulators observe emerging technology and firms validate compliance before full-scale launch. Sandboxes are a common policy tool for fintech, blockchain, and other convergent technologies.
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- Participants operate within agreed limits on customers, volume, and duration while reporting closely to the supervisor. The arrangement de-risks experimentation for firms and gives regulators evidence to shape proportionate rules, though admission criteria and exit pathways vary by jurisdiction.