Brazil prepares launch of new regulatory sandbox
Brazil’s National Monetary Council (CMN) has partnered up with the country’s central bank to launch a new regulatory sandbox.
The sandbox will kick off in 2021
Named the “Controlled Tests Environment for Financial and Payment Innovations”, the sandbox promotes new business models and competition in Brazil’s fintech space.
Potential entrants must employ “technological innovation” or promote an alternative use of existing technology.
All participants are required to carry out their transactions and tests “with integrity, reliability, security and confidentiality.”
Products and services provided within the test environment fall under the remit of the National Financial System (SFN) and the Brazilian Payment System (SPB).
The central bank will monitor results. It says it will impose limits on any participants it deems to be a risk to the systems of the SFN or SPB.
The sandbox is due to run in yearly cycles, with the first batch of experiments set to start it 2021.
Participation does not guarantee a firm the promise of a licence after the sandbox has run its course.
Brazil kicked off the first stages of its open banking development earlier this year.
Interbank network Banco24Horas partnered with UK-based Ozone API to help facilitate the move.
Brazil’s new open banking network will roll out in four stages between November 2020 and October 2021.
The central bank also made headline in summer, suspending all WhatsApp Pay services to “preserve an adequate competitive environment.”
