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Regulatory Sandboxes in Vietnam: A Case Study of the Benefits and Limitations
Introduction
This study examines the benefits and limitations of implementing regulatory sandboxes in Vietnam. The regulatory sandbox is a policy proposal aimed at reducing barriers to entry for new fintech firms by providing a safe space for testing and experimentation with innovative financial products and services.
Background
Regulatory sandboxes have gained popularity worldwide as a means to encourage innovation and competition in the fintech sector [1]. The sandbox allows fintech firms to test their products and services in a controlled environment before they are released into the market. This reduces regulatory uncertainty and transaction costs, allowing new firms to enter the market more easily.
Methodology
This study uses a case study approach, analyzing the benefits and limitations of implementing regulatory sandboxes in Vietnam. The analysis is based on existing literature and data from fintech firms that have participated in regulatory sandboxes worldwide [2].
Research Questions
- What are the benefits and limitations of implementing regulatory sandboxes in Vietnam?
- How can regulatory sandboxes contribute to the growth and development of the fintech sector in Vietnam?
Results
The results show that regulatory sandboxes can have significant benefits for fintech firms in Vietnam. These include:
- Reduced barriers to entry
- Increased capital availability
- Improved survival rates
- Enhanced financial inclusion
However, the study also highlights limitations to implementing a regulatory sandbox in Vietnam. These include:
- Political resistance from large incumbent financial institutions
- Limited resources and capacity to establish and manage a regulatory sandbox
Conclusion
This study provides evidence of the benefits and limitations of implementing regulatory sandboxes in Vietnam. The findings suggest that regulatory sandboxes can have positive impacts on fintech firms, including reduced barriers to entry, increased capital availability, improved survival rates, and enhanced financial inclusion. However, they also highlight limitations to implementation, including political resistance and limited resources. Future research should focus on addressing these limitations and exploring potential avenues for regulatory sandbox implementation in Vietnam.
References
[1] Cornelliet al. (2020). Regulatory sandboxes: A new framework for fintech innovation. Journal of Financial Regulation.
[2] Goo & Heo (2020). The impact of regulatory sandboxes on fintech firms. International Journal of Fintech and Business Models.