Israel finally readying a fintech ‘regulatory sandbox’

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The Arrangements Law that the treasury will soon be presenting to the cabinet will include rules enabling a “regulatory sandbox” that will give Israeli fast-growing financial technology startups an easier environment to experiment with products and services.A regulatory sandbox creates the conditions for innovative fintech companies to conduct live experiments in a controlled environment under a regulator’s supervision. Israel has been talking for more than two years about establishing one as a way of spurring growth in the local fintech sector.The program is designed to help startups hone their business model and for the government to see how legislation and regulations need to change to adapt to emerging financial technologies.The program will provide financial assistance to participating companies. It also aims to encourage Israeli startups to test out their technology in the local market rather than going directly overseas, as most existing startups do today.Investment in Israeli fintech startups more than doubled last year to a record $1.8 billion, an all-time record, according to a report Start-Up Nation Central issued two weeks ago. It said Israel was home to more than 500 fintech startups in 2019 and drew about 5% global fintech investment, ranking it fifth after China, the …

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