Bhutan: Technical Assistance Report-Review and Diagnostic of the Fintech Regulatory Sandbox Framework

At the request of the Royal Monetary Authority of Bhutan (RMA), the Monetary and Capital Markets Department (MCM) conducted a mission to review and strengthen Bhutan’s fintech regulatory sandbox (RS) framework. The mission was held from August 25 to September 2, 2025, in Thimphu, Bhutan and included a two-day capacity development workshop to strengthen the RMA staff’s expertise in managing the RS’s operations and fintech regulation, supervision and oversight. The mission assessed the RS's alignment with Bhutan's digital transformation goals, its capacity to foster financial innovation, and its effectiveness in regulatory oversight. The mission identified critical challenges including unclear strategic objectives, fragmented governance structures, resource constraints, and the absence of formal risk tolerance frameworks. The mission recommended realigning the RS with RMA's strategic priorities, narrowing its scope to regulated activities, reorganizing governance structures, establishing dedicated resources, and developing comprehensive capacity-building programs to enhance Bhutan's fintech ecosystem.