Posted on Feb 2, 2021
In recognition of the fact that innovation always precedes regulation regulator are required to establish a wholesome balance between market stability and consumer protection while providing sufficient opportunity for market innovation. This objective is always against the background of antipathy to overregulation that inhibit innovation. Hence, the Central Bank of Nigeria (“CBN”) in a bid to protect the integrity and continuity of the financial system, published a framework for Regulatory Sandbox Operations (“RSO”) in Nigeria (the “Sandbox Framework”).
The Sandbox Framework aims to increase the potential for innovative business models that advance financial inclusion, reduce time-to-market for innovative products/services/models, increase competition, and ensure adequate consumer protection. The RSO seeks to ensure adequate provisions for creating an enabling environment for innovation without compromising consumer safety and integrity of the national payment system. Ultimately, the RSO provides an avenue for aligning the expectation between the CBN and Fintech companies in the payment space, through formal guidance from the CBN.
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