Nepal’s Securities Board (SEBON) is bringing a ‘Regulatory Sandbox’ to test new financial technologies like Blockchain and Smart Contracts as part of its capital market policy for fiscal year 2083/84.
The Nepal Securities Board (SEBON) recently unveiled its capital market policy for the fiscal year 2083/84. A key announcement from this policy is the introduction of a ‘Regulatory Sandbox’. This initiative is designed to encourage innovative and advanced financial technologies within the capital market.
Under this new framework, technologies such as Blockchain and Smart Contracts will be tested in a controlled environment. The goal is to evaluate these innovations before they are fully implemented in the wider securities market.
What is the Regulatory Sandbox?
SEBON mentioned that this Regulatory Sandbox will operate in collaboration with relevant authorities. Its main purpose is to foster innovation based on financial technology, or FinTech. This sandbox will give a safe space for trying out new and potentially risky technologies within a limited scope, before they are fully launched into the market.
Blockchain and Smart Contracts in Focus
The policy outlines plans to study the potential of Blockchain technology. This study aims to make the process of recording securities more secure and transparent. In addition, efforts will be made to use Smart Contracts to automate and make transaction processes more reliable in the capital market.
SEBON is also adopting a ‘Digital First’ approach to make capital market services more tech-friendly. This includes utilizing technologies like Digital ID, electronic KYC (E-KYC), and Digital Signatures to make service delivery faster and smoother.
Moreover, the policy includes a vision to gradually transform Nepal’s capital market into a ‘Paperless Capital Market’. This will be achieved through the use of secure digital technologies, including blockchain.
The board noted that advanced capital markets globally are increasingly using Artificial Intelligence (AI), Blockchain, and Big Data. SEBON believes Nepal also need to modernize its regulatory system to keep up with these global trends.
In line with this, the board has committed itself to evolve from a traditional regulator into a ‘Technology-Capable Regulator’.
AI Disclaimer: This article was originally published on https://bajarkochirfar.com. It has been translated with the help of AI. For the best understanding and accurate facts, we recommend reading the original Nepali version.
