The Securities and Exchange Board of India (SEBI) has revealed that it is adopting a ‘regulatory sandbox’ approach to utilize cutting-edge technologies such as blockchain and artificial intelligence (AI).

The SEBI officials have claimed that innovation in Fintech can be better achieved by following a ‘sandbox’ approach. For instance, implementing blockchain for settlement; AI such as Robo-advisory, e-wallets, security systems for intermediaries; and market infrastructure institutions, sorting out complaints, outsourcing and development of innovative technologies can be streamlined by adopting the mechanism.

According to the sources, regulatory sandbox approach illustrates temporary relaxations of regulations to build a safe platform for companies to test Fintech services in a live environment for a fixed period, without lending them full authorization and licensing protocol.