The latest version reduced the number of fintech solutions for the regulatory sandbox from six to three due to limited resources. — Vietnam News
HANOI: The State Bank of Vietnam has submitted to the government a draft decree on a regulatory sandbox for financial technology (fintech), in which the pilot implementation will be carried out for only three solutions, credit scoring, open application programming interface (API) and peer-to-peer (P2P) lending.
After seven versions of the draft, which have been developed since 2023, the latest version reduced the number of fintech solutions for the regulatory sandbox from six to three due to limited resources.
Previously, six solutions were proposed, which also included the extension of credits on technology platforms, technology-based solutions (including blockchain), and other banking support services in line with the sandbox programme.
The central bank said that the regulatory sandbox will be implemented for three solutions to ensure appropriateness to the resources.
The implementation of the sandbox will last a maximum of two years.
The central bank will decide the scope of fintech solutions offered for sandbox implementation, including but not limited to transaction limits and the number of participants.
The banking industry in recent years has witnessed a strong rise in the applications of new technologies, the central bank said.
In Vietnam, fintech development was robust with the participation of technology start-ups and non-bank organisations in the banking and finance sector through the provision of solutions to support banking activities without directly providing services to end-users or independently.
The fintech boom has pushed financial and monetary management agencies into difficulties in supervising risks such as money laundering and terrorist financing, ensuring network security, protecting user data, and protecting the rights of consumers and investors.
The absence of a regulatory framework poses challenges in harmonising the promotion of innovation and fair competition with traditional financial institutions and leaves fintech companies in limbo.
The absence of a regulatory framework also caused several other problems.
For example, the recent emergence of P2P lending in Vietnam, coupled with the lack of transparency and regulatory framework, led to negative phenomena such as predatory lending and disputes. — Viet Nam News/ANN
