Alberta is proposing rules that would make it easier for entrepreneurs to test products in the emerging field of cryptocurrencies and online banking.
Finance Minister Travis Toews says Bill 13, the Financial Innovation Act, that is before the legislature calls for setting up what is known as a regulatory “sandbox.”
Companies would be allowed to temporarily break or ignore select financial rules and regulations under close government supervision to test new programs.
Companies would also be able to get access to Albertans’ private information, but only within strict parameters and only with that person’s permission.
Toews says the “sandbox” is being used in the United States, Australia and the United Kingdom to help create tech jobs and to keep those regions on the cutting edge of financial technology.
If the bill passes, companies could look at innovations in everything from cryptocurrencies to financial apps, security protections and real-time, multi-user financial accounting.
The government hopes to begin taking applications on July 1.
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“This will be a strong incentive for fintech companies to move to Alberta and create jobs,” Toews said Wednesday before introducing the bill in the legislature.
“In turn, it will further help diversify our economy and add to our growing reputation as a hub for world-class financial services.”
The government says the legislation would make Alberta the first such “sandbox” jurisdiction in Canada.
Companies would have to have some physical presence in the province, such as an office or senior staff.
They would be offered certificates granting them permission to perform tests or functions normally declared out of bounds under the Loan and Trust Corporations Act, the Credit Union Act and other related rules governing finance.
The companies would have their names, details and programs on a public website.
The government would be free to change the rules to adjust to changing circumstances during testing.
Alberta’s information and privacy commissioner would have to sign off on exemptions.
“(The bill) is carefully designed to ensure any companies participating in the sandbox operate in a safe and sound manner,” said Toews.
Breaking the rules could result in fines up to $100,000 for a first offence and up to $200,000 for subsequent violations.
Toews said the province is seeking a higher profile and to gain benefits from the emerging fintech industry.
The province expects interest in a range of technologies, including blockchains, which are decentralized online record- keeping and authentication programs for cryptocurrency transactions.
There are also developments in software allowing apps to talk to each other and security precautions such as fingerprint and facial recognition.
There is emerging work in database accounting programs that can be shared in real time across multiple platforms.
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