In a rapidly evolving technology landscape, stakeholders around the world grapple with the challenges that data policy presents across multiple sectors, including sustainability, artificial intelligence (AI), finance, mobility, and healthcare. Amidst this backdrop, sandboxes emerge as a promising avenue for international cooperation and collaborative experimentation, offering a platform to test and refine technologies, business models, and regulatory frameworks.
The Datasphere Initiative, in partnership with the Brazilian Association of Software Companies (ABES), organized a series of dialogues at Banco do Brasil focused on sandbox experiences, best practices, and implementation challenges.
Over 400 participants from 213 organizations registered to attend the event “Outside the Box: Experiences of National and International Sandboxes,” which provided an opportunity to map Brazilian sandbox experiences and build on international discussions. Invited experts reflected on the relevance of this methodology in areas such as fintech, artificial intelligence, and data governance. Participants had the opportunity to share insights on how sandboxes can be used to promote regulatory agility and responsible innovation.
During the opening session, speakers underscored the importance of evidence-based policymaking, advocating for a systematic understanding of sandbox experiences to facilitate implementation and measure impact effectively. They emphasized the need to develop processes, embrace good practices, and establish clear guidelines for regulators.
“There is the process of thinking about what a good sandbox is, what it means to make a good sandbox, what the good practices are, how we evaluate the impact of these sandboxes, and how we can make implementation easier: creating guides and manuals.” – Lorrayne Porciuncula, Executive Director, Datasphere Initiative.
Opening the Sandbox
Maria Marinho Gillot, Professor at UEPB/Mackenzie, introduced the sandbox concept as a regulatory and collaborative tool for testing innovations in a controlled environment. Transparency and risk management emerged as key pillars in sandbox development, with panelists advocating for dedicated information platforms, clear regulatory responsibilities, and stakeholder involvement throughout the process.
“If well-designed, sandboxes are great instruments for evidence-based public policy.” – Christian Perrone, Head of Rights and Technology and GovTech Teams, Institute for Technology and Society (ITS Rio).
Sandboxes and Artificial Intelligence
Miriam Wimmer, Director at the National Data Protection Authority (ANPD) delved into the intersection of sandboxes and artificial intelligence, proposing collaborative spaces to promote responsible regulation and interpret legal provisions accurately. Philipe Moura from ABRIA and Guilherme Pinheiro from IDP emphasized the need for flexibility in AI regulation, despite the absence of specific laws, and discussed methodological challenges in designing regulatory sandboxes.
“When you have an experimental clause, you can revoke it or you can also make it more flexible. For example, the fact that there isn’t a specific AI law yet doesn’t mean that you can’t have good regulatory sandboxes for AI.” – Guilherme Pinheiro, Professor at IDP.
Sandboxes as a Tool for Regulatory Agility and Responsible Innovation
Sandboxes play a crucial role in promoting proactive regulatory innovation in a controlled environment. Gustavo Machado de Freitas from ANAC highlighted the significance of responsible experimentation and the agility to learn from new systems, while Nilo Pasquali, Superintendent of Planning and Regulation at ANATEL, highlighted the sandbox’s controlled environment for testing new ideas.
“It is a controlled environment, because if it goes wrong the impact is minor, if it goes right we will learn and we can incorporate this into the regulations, which is the ultimate objective. If it is something that is positive and works for consumers, it makes sense for the regulator to eliminate rules that block this type of mechanism and make it happen.” – Nilo Pasquali.
Other speakers elaborated on essential aspects of sandbox implementation, including the establishment of normative frameworks, robust governance systems, and mechanisms for public participation.
Vanessa Silva, Chief of the Regulatory Sandbox Project at the Regulatory Agenda, provided insights into ANTT‘s regulatory sandbox, which facilitates collaborative experimentation with national or international entities within a defined timeframe. Felipe Moraes, Manager of Economic Regulation at ANEEL, underscored the importance of regulatory flexibility and methodological rigor in sandbox implementation to foster innovation while ensuring regulatory compliance.
Sabrina Maciel, Director of the Regulatory Policy Department (Dereg), emphasized the role of regulatory capacity-building in fostering innovation and addressing technological challenges. Maciel highlighted the importance of data governance and stakeholder collaboration in monitoring sandbox outcomes and promoting regulatory simplification to stimulate innovation.
Municipal Experiences with Sandboxes
The session on municipal experiences showcased the potential of sandboxes in city governance. Bruno Portela (Federal Attorney, Federal Attorney General’s Office (AGU)), Carina Quirino (Subsecretary of Regulation and Business Environment at the Municipal Department of Urban and Economic Development in Rio de Janeiro – RJ), and Laryssa Almeida (Secretary of Science, Technology, and Innovation in Campina Grande – PB) shared insights on promoting innovation, coordination, and strategic alliances. They also spoke about the importance of learning from trial and error to improve governance.
“Today we have 25 instruments to promote innovation, coordination, cooperation, and strategic alliances for innovation. We have several options to make our cities smarter.” – Bruno Portela.
Eduardo Tadeu Pereira, Executive Director of the Brazilian Association of Municipalities (ABM), emphasized the cultural shift needed to adopt innovative approaches in city governance.
Sandboxes in the Financial Sector
In the financial sector, Daniel Canhete from the Central Bank of Brazil discussed sandboxes as platforms for developing new business models, highlighting challenges in implementation.
“We found that the more successful projects were those that had already reached a level of maturity. The more innovative projects faced greater challenges in its implementation.” – Daniel Canhete.
Additional challenges were pointed out by Ricardo Fernandes, General Coordinator of CRIA CVM/FinanceLab, who noted that sandbox regulation in the financial sector is resource-intensive and not easily scalable.
Gabriel Laender from Laenderlaw emphasized the cultural shift in regulators towards creating exceptions rather than integrating sandboxes into broader innovation strategies. Additional insights were shared on privacy considerations, with Yasodara Cordova from Unico reflecting on the complexities of implementing privacy measures within sandbox environments.
International Cooperation
International cooperation emerged as a recurring theme, with speakers exchanging experiences to inform national sandbox implementation and calling for increased collaboration and resource utilization. The need to overcome cultural and economic challenges to integrate sandboxes into the regulatory ecosystem was also emphasized.
“Cooperation agencies and governments need to know that the use of sandboxes will increase. They need to equip themselves with the necessary tools and resources to facilitate more effective cooperation and ensure its strength in the evolving landscape.” – Armando Guio, Director of the Center of Networks at Harvard University.
Insights shared by Carolina Von der Weid (Ministry of Foreign Affairs of Brazil), Marcelo Almeida (ABES), and Michael Hennessey (IDB) underscored the need to promote cooperation among stakeholders and exchange experiences across different countries. Additionally, they highlighted the significance of addressing cultural and economic challenges to ensure the successful integration of sandboxes into regulatory frameworks.
Finally, Lorrayne proposed the urgent establishment of an agenda to devise collective solutions for common challenges, such as the climate crisis, emphasizing the critical role of collective action in tackling pressing global issues.
All in all, the insights shared during the event underscored the growing momentum behind regulatory innovation and the role of sandboxes in driving this change forward.
With a clear understanding of the challenges and opportunities presented by sandboxes, there’s a collective call to action for stakeholders to embrace cultural shifts, foster collaboration, and promote regulatory agility. Moving forward, projects like the Datasphere Initiative aim to continue facilitating dialogue and knowledge exchange through platforms such as the proposed Global Sandboxes Forum, emphasizing the importance of international cooperation in navigating the complexities of regulatory landscapes and advancing responsible innovation on a global scale.
- Read the report.
- Watch the recording.
- More information about the event in English and Portuguese.
