Exploration of "Regulatory Sandbox" Practices in the Crypto Assets Field

The concept of "Regulatory Sandbox" originated from the UK government in 2015, aimed at providing a relatively relaxed environment for fintech companies to test innovative products and services. This model has since been adopted by multiple countries around the world for regulatory innovation in the field of Crypto Assets and virtual finance.

In China, apart from Hong Kong, places like Ganzhou in Jiangxi, Taizhou in Shandong, Hangzhou in Zhejiang, and Guangzhou and Shenzhen have also begun the exploration of the "Regulatory Sandbox". Among them, the practices in Hong Kong and Ganzhou are the most representative.

In July 2017, Ganzhou City in Jiangxi Province launched a blockchain financial industry Regulatory Sandbox, which is the first government-led blockchain "Regulatory Sandbox" in mainland China. The park encourages blockchain technology innovation and the entry of financial application innovation enterprises, providing policy support. Currently, the park has established a 25,000 square meter industrial base and has formulated a series of related policies.

In November 2018, the Hong Kong Securities and Futures Commission announced the inclusion of crypto assets exchanges in the "Regulatory Sandbox". This initiative is divided into two phases, with the second phase requiring at least 12 months. During this period, the Hong Kong Securities and Futures Commission will observe the operations of crypto assets exchanges to determine whether regulation should be implemented.

It is worth noting that there are essential differences between the "Regulatory Sandbox" in Ganzhou and Hong Kong. Hong Kong's model is similar to international standards and is led by the highest regulatory authority, with experimental results potentially directly influencing future regulatory policies. In contrast, Ganzhou's model is more like an incubation zone led by local governments, which is part of a localized differentiation development strategy.

In addition, places like Shenzhen and Taishan have also made similar attempts at "Regulatory Sandbox," but these projects are mostly led by non-profit organizations, lacking direct involvement from the government or regulatory agencies. Strictly speaking, these projects may be more appropriately referred to as "industry sandboxes" or industrial parks.

The real "Regulatory Sandbox" should connect fintech innovation enterprises with government regulatory departments, allowing both parties to jointly explore new policies suitable for fintech innovation within a specific scope. The physical space is not the core; the key is the "regulation" itself.

Currently, most cities in the country are using the name "Regulatory Sandbox" to implement park incubation. Although they provide certain relaxed policies, the substantial significance for promoting the coordinated development of regulatory mechanisms and financial technology innovation is limited. While it cannot be ruled out that these industry clusters may produce effective self-regulatory norms, which in turn could influence regulatory policies, based on the current operational situation of blockchain industry parks, this goal remains difficult to achieve.