Financial Innovations in Czechia: Considerations for Establishment of Regulatory Sandbox

Abstract

The regulatory sandbox has been established in many EU Member States as well as developer non-EU countries as a tool for fostering financial innovation. On the contrary, the Czech Republic has not yet prepared a sandbox. The article introduces the topic, discusses the sandbox in the European and international context, and briefly explains the history and current status of financial innovations in the Czech Republic. The authors also discuss the OECD report on recommendations for the design of the FinTech Sandbox. Recommendations of which they find to be unsuitable for implementation due to the fundamental flaws of the report and the omission of an analysis of the Czech legal system. Finally, the authors of this article elaborate on the various options and parameters for the Czech sandbox. The authors recommend implementing a legal definition of a sandbox in the Czech legal system. Also, the authors call for the establishment of a sandbox that could support the development of financial innovation as Czech consumers show a particularly supportive stance towards new technologies.