Egypt FRA launches 1st regulatory sandbox to support fintech
According to the Central Bank of Egypt (CBE), the regulatory sandbox provides a real-time testing environment for fintech innovators developing new business models hindered by strict authorization processes and regulatory uncertainty. This enables faster access to innovative financial solutions while embedding compliance into the fintech ecosystem from the outset.
The regulatory sandbox will enable those engaged in non-banking financial activities to utilize fintech. Accordingly, entities registered in the outsourcing registry for fintech will be able to conduct tests on innovative applications, including business models and related mechanisms.
This move aligns with the FRA’s vision to digitize non-banking financial transactions and complete the sector’s digital transformation. The sandbox will help accelerate and simplify access to non-banking financial services while expanding the base of beneficiaries.
Mohamed Farid, FRA chairman, highlighted that the regulatory sandbox will enhance the authority’s efforts to support startups in the digital space, enabling them to deliver non-banking financial services more effectively.
He noted that this initiative would stimulate innovation within the non-banking financial sector, facilitate access to these services, and enhance the capabilities of non-banking financial companies and service providers using digital technologies.
The FRA aims to foster fintech innovation by providing a regulatory environment that supports startups and encourages the development of new solutions.
Farid also outlined several key steps the FRA took to digitize financial transactions. These include the enactment of Law No. 5 of 2022, which regulates the use of technology in non-banking financial activities, along with a series of related executive decisions: Decision No. 58, Decision No. 139 of 2023, Decision No. 140 of 2023, and Decision No. 141 of 2023. These regulations cover digital identity and Know Your Customer (KYC) protocols and the companies’ operations that assist non-banking financial institutions in digital transformation.
While attending Cairo ICT 2024, Farid announced that the first regulatory sandbox in the non-banking financial sector will launch soon, marking a significant step towards supporting the growth of fintech startups in Egypt.