Utah has become the second state in the US to launch a regulatory sandbox to encourange innovation in financial technology.
The Utah Department of Commerce announced the start of the sandbox last week, following the passing of legislation HB378 which permits fintech companies to apply for a special extension when setting up a business.
Participants in the sandbox will be able to test new financial services and products on a limited basis without having to go through the usual approvals process. However, while they won’t need a license right away, they will still be vetted and monitored by the state.
Marc Roberts, Utah State Representative, commented: “I’m excited about Utah’s regulatory sandbox and the chance it will give fintech companies and entrepreneurs in Utah the change to take innovative products and ideas to market without having to jump through the traditional regulatory hoops and licensing requirements which can be burdensome and costly. This is good for Utah and the future of fintech innovation.”
If a company can prove its service is viable during a prescribed trial period, it will be able to progress through the rest of the usual regulatory process.