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| A draft decree on a regulatory sandbox for fintech has been submitted to the government, which will provide a framework for fintech solutions including credit scoring, open application programming interface (API) and P2P lending. — Photo tapchitaichinh.vn |
HÀ NỘI — The State Bank of Vietnam has submitted to the government a draft decree on a regulatory sandbox for fintech in which pilot implementation will be carried out for only three solutions, credit scoring, open application programming interface (API) and P2P lending.
After seven versions of the project that have been developed since 2023, the latest version reduced the number of fintech solutions for the regulatory sandbox from six to three with limited resources for implementation.
Previously, six solutions were proposed, which also included the extension of credits on a technology platform, technology-based solutions (including blockchain) and other banking support services in line with the sandbox program.
The central bank said the regulatory sandbox will be implemented for three solutions to ensure resource adequacy. The sandbox implementation will last for a maximum of two years.
The central bank will decide on the scope of fintech solutions proposed under the sandbox implementation, including, but not limited to, transaction limits and the number of participants.
The banking sector has seen a sharp increase in the application of new technologies in recent years, the central bank said.
In Vietnam, fintech development has been robust with the participation of technology start-ups and non-banking organizations in the banking and financial sector through providing solutions to support banking activities without directly providing services to end users or independently.
The rise of fintech has made it difficult for financial and monetary management institutions to monitor risks such as money laundering and terrorist financing, ensure network security, protect user data and the rights of consumers and investors. The lack of a regulatory framework poses challenges in harmonizing the promotion of innovation and fair competition with traditional financial institutions, and puts fintech companies in uncertainty.
The lack of a regulatory framework has also led to a number of problems.
For example, the recent emergence of P2P lending in Vietnam, due to the lack of transparency and regulatory framework, has led to negative phenomena such as predatory lending and conflicts.
Many countries have developed regulatory sandbox policies for fintech that will serve as a basis for assessing the feasibility, benefits and risks of solutions, in order to develop appropriate responses and decisions, the central bank said. — VNS