The Zanzibar government has started a blockchain sandbox program to encourage the growth of new businesses and technology in the area. The program, sponsored by the Xinfin XDC network and built by Ledgerfi IT Solutions, enables startups to implement their blockchain-related solutions within the National Blockchain Network's trial mode environment.
Through this sandbox, Zanzibar aims to become a technological hub in the region where local and international ventures can test their ideas within a legal framework.
The establishment of this sandbox program correlates to the same in Tanzania despite focusing on encouraging the right environment for fintech startups. Their purpose is to rationalise the legislation on business regulation and minimise bureaucratic constraints for new start-ups, which, in turn, may interest investors and improve the investment climate as a whole.
Ventures selected to join Zanzibar's sandbox will, on one side, be required to operate in a more controlled setting that helps manage risks attendant upon launching new technologies.
Some of the key areas Zanzibar's sandbox program focuses on include fintech, the key sector where startups that offer digital ways to open up financial services to more people are supported. The government has stressed those approaches, as these changes can dramatically influence the regional economy. Companies in identity verification, financial, and certification solutions will be considered favourably during the evaluation.
As Seif Said, the director general of Zanzibar's e-Government Authority, stated, the overarching goal is to foster the production of new innovative technologies such as blockchain and artificial intelligence.
The government is focusing on financial inclusion as part of a more significant effort to enhance financial services for excluded groups in the archipelago, demonstrating their commitment to developing startups and new technologies.
Winners of the contests will get a chance to work with some industry professionals while training with solutions to improve their technical competence. This sandbox is expected to serve as a platform for sharing knowledge and skills by ensuring that new entrepreneurs can address issues related to new ventures.
The regulatory framework adopted by Zanzibar's National Blockchain Network was designed to accommodate and support innovative firms. This makes the sandbox appealing since it provides a relaxed, non-aggressive approach to regulating innovative concepts whose proponents are unsure of their feasibility when introduced to the full-scale market intact. This structure is expected to reduce the risk associated with most start-up businesses, increasing their attractiveness to investors.