The Spanish government has approved draft legislation aimed at encouraging the digital transformation of the financial system through the establishment of a regulatory sandbox, where businesses can trial cutting-edge projects with real customers.
The approval of the draft bill places Spain among a number of other countries — six in Europe and less than 30 worldwide - to introduce a supervised and ring-fenced testing environment for innovative financial products.
Once the parliamentary proceedings are finalised, the Secretary of the Treasury is expected to open the process to the first wave of applications, which in principle can be submitted by any company — regulated or not — with a project that uses innovative technology for the delivery of financial products and/or services.
Project applications will be studied and assessed by the Department of Treasury and regulatory authorities, including Spain’s central bank, the National Securities Market Commission, and/or the General Directorate of Insurance.
The initiative has been welcomed by Lucía Pacheco of BBVA’s Regulation team: "We have a few months of intense work ahead, which will undoubtedly require significant effort and coordination on the part of the authorities, but also by the private sector. The expected outcome is promising, because we can move closer to the long-awaited balance between innovative development and necessary financial stability. This step represents an important milestone on that journey."