Florida could become one of the first states in the nation to establish a financial technology sandbox, providing what supporters say would be a welcoming business environment for technology entrepreneurs.
Florida House Bill 1391, creating a fintech sandbox, has advanced in two Florida legislative committees, said Jason Holloway, CEO of St. Petersburg-based fintech consulting firm DLT Consulting Inc. and a member of the Florida Blockchain Task Force. The bill still needs approval from a third committee before moving to the full House for debate, he said.
A fintech sandbox would give regulatory flexibility to companies to experiment and create new innovative products, financial or otherwise, Holloway said during a Feb. 20 program organized by BlockSpaces at Embarc Collective in Tampa.
“The reason some startups are hesitant to come to Florida is sometimes [new technologies] aren’t completely outlined. They hire a lobbying firm or a legal firm, sit down with the regulators, but the regulators don’t really know. They say, ‘You can try. It might be illegal. We don’t know,’” Holloway said. “Everything is so innovative it’s almost like the law hasn’t caught up yet. It’s a gray area. The sandbox allows you to sit down one-on-one with the regulators and say, this is what we want to do, these are the steps we want to take. They’ll say, we think you can, this is what you can do and if you mess up somehow, it’s OK. That’s why we have the sandbox, we know you’re not trying to scam people if it didn’t work out.
“It’s giving us an outlet to have new innovative companies come in and try things that right now they’re scared to do.”
The measure is a priority for Gov. Ron DeSantis, who last year announced several initiatives to encourage fintech companies to start, relocate and expand in Florida. The fintech sandbox legislation would allow the Office of Financial Regulation to provide statutory authority to waive certain licensure requirements for fintech companies to offer innovative services in Florida within certain parameters, providing more opportunities for innovation and entrepreneurship in Florida, while ensuring OFR has sufficient authority to protect consumers, a news release from the governor’s office said.
“Gov. DeSantis said he wants to make Florida the Silicon Valley of blockchain and fintech,” said Samuel Armes, president of the Florida Blockchain Business Association in Tampa.
The legislative update was part of a program focused on financial service disruption and hosted by BlockSpaces, a blockchain technology development studio, in partnership with Fintech Stage and MasterMinds Tampa.
Innovation is driven by rebels, said keynote speaker Matteo Rizzi, an international fintech investor, author and entrepreneur who created the Fintech Stage platform. Rebels are the people who are smart but hard to promote, he said. They are often viewed as misfits in corporate settings instead of being treated as a resource.
“Behind every failure, there is someone or a team that has not been heard, that was tolerated instead of empowered,” Rizzi said. Rebels should be grouped in teams and encouraged to collaborate with other workers companywide. “I’m pretty sure that not dealing with them is to waste the chance to think about what could really disrupt your business.”
The Tampa-St. Petersburg area has all the factors needed to make it a hub for technology investment, said Andreas Calabrese, former venture capitalist and managing director at Zetta Amperstand, a Tampa consulting firm.
“The key things I see here are a central communications source, or central meeting area or place for technology founders and investors. That’s here at Embarc,” Calabrese said. “The second thing is early stage funding, and then successful companies that get to the exit level and whose employees go on to start new companies. All of those things are here.”
Gabe Higgins (center), co-founder of BlockSpaces, interviews Andreas Calabrese (left), managing director at Zetta Amperstand, and Shane Smith, director of central Florida for the Jim Moran Institute for Global Entrepreneurship.
Area companies are “investable” for several reasons, said Shane Smith, director of central Florida for the Jim Moran Institute for Entrepreneurship in the Florida State University College of Business.
“The culture, the environment, the brain force we already have here are competitive with a lot of other cities, and then there’s that tax system, where it’s more attractive to start something in this environment,” Smith said. “We’re not Silicon Valley, but I know I could have a fair shake at attracting some of that talent out here, when I say when I pay you, this is how much you get to keep.”
SKUxchange, a St. Petersburg startup that uses blockchain technology, is one of those companies that has drawn investor attention.
SKUx is out to transform the $1 trillion promotional industry, said Bobby Tinsley, co-founder and executive vice president of SKUx, speaking at the BlockSpaces program.
The company’s technology eliminates fraud for businesses that deal with promotional offers, while creating more transparency and faster payments, Tinsley said.
“We are not a coupon. We are a directed spend digital smart offer or smart incentive that runs in a completely different way … It runs like a payment transaction. That’s what the brands and partners we are working with are excited about. They have the ability they’ve never been able to do and actually track ROI. We can guarantee a brand will never go over budget on a promotional offer campaign. We can increase foot traffic to the retailer. We can drive all of the things the brands want to do,” Tinsley said.
The post Florida poised to offer regulatory flexibility for financial innovation appeared first on St Pete Catalyst.