Russia’s regulatory sandbox came into effect last month to boost the implementation of innovative blockchain tech. Usually, companies face challenges when implementing and testing innovative tech because they require the amendment of existing legislation. Most importantly, creating and testing new blockchain tech-based products needs special requirements that are mostly inconsistent with currently available regulations.
Russia introduces regulatory sandbox to allow testing of new blockchain innovations
However, this is a challenge to address by introducing a special “regulatory sandbox” regime. Notably, this implies a need to create an ecosystem within which state-owned enterprises and companies can test innovative developments without any huddles.
On January 28, federal law No. 258, “On Experimental Legal Regimes in the Field of Digital Innovation in the Russian Federation” started working. The sandbox allows testing of new software to ensure it is useful and effective before deciding if legislation needs a change to accommodate the innovation based on test results. Therefore, having a “sandbox” in a [particular limited area such as within one city can allow several companies to test their innovative products.
Besides distributed ledger technology, the list also includes big data, artificial intelligence, quantum technologies, robotics as well as other technologies. Companies will comply easily with current regulations with some exemptions necessary for testing if new technologies. Generally, sandboxes will be an impetus for new job creations, the emergence of new organizations, and the enhanced competitiveness of Russian firms globally.
Sandbox regime has a 3-year term with possible extension
Most importantly, the experimental legal regime introduction will be possible in financial activity, construction, trade, medicine, industry, agriculture, municipal and state services provision, control, and implementation. The Russian sandbox term is limited to three years, with the option of an extension for another year. Equally, it allows applications from organizations that propose a special legal regime introduction.
Among the areas where sandbox testing could deliver significant change is in the utilities and housing sectors. The DLT will simplify payment procedures, reduce paperwork and make billion transparent.