The Development of FinTech Products and Services in Seychelles
A new regulation soon to come in effect will definitely propel Seychelles at the forefront of innovative products, making it an attractive center for locating fintech businesses.
The proposed sandbox will provide a regulated environment within which Seychelles-registered companies carrying out FinTech-related financial services within the securities industry could operate.
The FSA considers the sandbox is instrumental in its strategy of moving the non-bank financial services of Seychelles to the next level, as the sandbox will not only attract higher value-added products and services to its financial services sector, but will also provide visibility to the jurisdiction as one which is modern and forward-looking, which is much needed in a globally dynamic environment.
Financial Technologies or “FinTech” as defined by the International Organisation of Securities Commission (IOSCO), is a portmanteau used to describe a variety of innovative finance-related business models that are based on emerging technologies that have the potential to transform and disrupt the financial services industry by addressing the many inefficiencies that not only create undue friction in the provision of financial services, but also at times curtail financial inclusion. Many examples of these new FinTech-based business models have emerged over recent times, ranging from equity crowd funding platforms, through robo-advisory, to social trading platforms. Emerging technologies such as cognitive computing, artificial intelligence, and distributed ledger technologies (DLT) are examples of the types of technologies that underlie FinTech.
Cryptocurrencies, such as Bitcoins (BTC), Ripple (XRP), Ethereum (ETH) and Litecoin (LTC), have been the centre of much hype recently. These cryptocurrencies are generally decentralised in nature, are based on the blockchain technology and are not backed by any national Central Banks. They hold the promise of improved systems of payment, although at the moment, the high volatility in their prices means that they are not a viable store of value, an important characteristic of money.
Fintech Regulatory Sandbox in Seychelles
A FinTech regulatory sandbox is a legal framework put in place and managed by a financial sector regulator to allow small-scale, live testing of FinTech financial services or products by private entities in a controlled environment. In the sandbox, these entities would operate under a special exemption, allowance, or other limited, time-bound exceptions under the regulator’s supervision.
Key features of a regulatory sandbox:
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