Kanishka NaikA regulatory sandbox lets private firms test financial innovations live, in a controlled environment, under direct regulator supervision.
The UK FCA launched the first regulatory sandbox in 2015. Over 50 countries have since adopted the model. UK sandbox firms saw a 15% rise in capital raised. (BIS WP 901)
CGAP and the World Bank describe sandboxes as tools allowing regulators to base decisions on live experiment results—especially useful in underserved financial markets.