Zanzibar Launches Blockchain Sandbox to Support Tech Startups

The government of Zanzibar created a national blockchain sandbox, where startups can test innovative technologies before scaling them. The programme was developed by LedgerFi IT Solutions and runs on the XinFin Powering XDC blockchain network.

Authorities in Zanzibar, a semi-autonomous region in Tanzania, announced the launch of the National Blockchain Sandbox, a blockchain sandbox designed to encourage the development of tech startups in the region. According to local media, the initiative aims not only to help startups test their solutions, but also to make Zanzibar a hub for innovation.

Local startups will be able to use the blockchain sandbox to test their technologies within a national blockchain network, using advanced encryption and multi-layered security. According to Said Seif Said, CEO of the Zanzibar eGovernment Authority (eGAZ), the initiative aims to create an enabling environment for the development of initiatives based on DLT systems, artificial intelligence and other advanced technologies. Special attention will be given to startups working on solutions for financial inclusion, data verification and certificate issuance.

Startups that demonstrate their usefulness to the region and the broad applications of the services they develop will have access to training and incubation programmes, which will enable them to strengthen their technical capabilities and increase their competitiveness in the market, as well as expand into other markets.

A national blockchain network will also create a more relaxed regulatory environment for start-ups, allowing them to test their products in a more controlled environment before going to market. Such a system will reduce risks and speed up the process of attracting venture capital investment, as investors are interested not only in a startup’s ambitions, but also in its ability to function and scale in the market.

As a reminder, the development of various sandboxes has become mainstream, with analysts at the World Economic Forum (WEF) arguing that specialized regulatory sandboxes can reduce risk, improve transparency and stimulate the development of the DeFi sector. Within such sandboxes, for example, the UK is testing tokenization of TradFi assets, Thailand is testing crypto services, and a sandbox in the EU allows blockchain projects to receive regulatory guidance from regulators.

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