Arizona’s regulatory sandbox programme puts US on competitive fintech ground
The US first regulatory sandbox programme (RSP) aimed at national and global financial services enterprises has started in Arizona, joining the UK, Singapore, Taiwan, UAE and Australia as the global leaders in the sector’s development and investment.
The state recently launched an RSP to enable fintech businesses to validate, test and prove their new technologies, products, services, business models and delivery mechanisms for up to 24 months, without regulatory costs and formal licensing. The sandbox is open to start-ups, entrepreneurs and established companies.
As the American complement to RSPs like those in US, Singapore, Taiwan, UAE and Australia, Arizona offers a very competitive operating cost environment in the US and boasts one of the easiest to navigate regulatory environments.
Financial services and technology companies seek areas with progressive policies and speed-to-market. In the US, that’s where Arizona shines. The state’s RSP welcomes companies testing and deploying innovations in blockchain, cryptocurrency, consumer lending and money transmission.
The sandbox provides caps on the numbers of individuals who may participate in a particular sandbox agreement and caps on the amount of loans that may be issued. Participants can make consumer lender loans of up $15,000 (€11,712) per individual and $50,000 (€39,007.12) per consumer or provide products or services as a money transmitter up to $2,500 (€2,143) per transaction and $25,000 (€21,432) per consumer. The RSP ends 1 July 2028.
The sandbox adds to the region’s ongoing work and reputation as a global growth accelerator, where it provides a soft landing spot for foreign-owned enterprises in partnership with Arizona State University’s SkySong innovation center. The preeminent innovation center provides three-months of free rent for foreign-owned enterprises that want to launch from Arizona.
Currently, a turbulent tariff debate rages between Washington, DC, China and Western Europe, and foreign companies eyeing US expansion have few options. They can go state-by-state for the regulation process, or enter through an existing license of US-based companies. The Arizona RSP helps de-risk foreign strategies to enter the US market. It opens the door for reciprocity agreements with foreign countries that streamline the process to invest in the US by testing and validating products in Arizona under its progressive, business-friendly regulatory process.
Greater Phoenix has a significant financial service industry concentration, with a number of business units from Fortune 500 companies. Its ecosystem of companies includes legacy financial powerhouses such as Wells Fargo, JP Morgan Chase, American Express and Bank of America, and burgeoning fintech and authentication companies such as Zelle and Trusona. The area is home to some of the most prolific producers of new technology in the sector and is a hub for innovation. Its finance and insurance labor force of 145,489 workers and growing is specialized and competitive. The state’s university system is among the best in the nation, with US News & World Report naming Arizona State University “America’s Most Innovative University” for the last four years.
Fintechs that choose the Arizona RSP get these full capabilities entering the market and have the Greater Phoenix Economic Council as a partner to help launch, scale and minimise risk.
Greater Phoenix is the “connected place”, with legacy of companies and innovations in financial services, not to mention aerospace, defense, micro-electronics and healthcare. It has pioneered developments in driverless vehicles, wearable tech, internet of things (IoT), cybersecurity and blockchain. It has incubated emerging technologies that globally disrupt and dictate how consumers will use technology in the future. Fintech and financial services are critical to the area’s legacy industry transformation efforts.
The sandbox is an opportunity for companies to reduce compliance costs and accelerate their go-to-market strategies for innovative fintech products with clear regulatory guidance and cooperation from local policymakers. And with the RSP, Greater Phoenix is established firmly as the entry point into the American market.
GPEC is one of the nation’s longest-standing public private partnerships for economic development. During Camacho’s tenure, GPEC has led the attraction of more than 322 companies creating 55,617 jobs and $5.6 billion in capital investment. Some of the more notable projects include Apple, Deloitte, Infosys, Creighton Medical School, Silicon Valley Bank (SVB) and many others.
He oversees the domestic and international business development and market strategies while serving as GPEC’s executive leader in community interactions.