A regulatory sandbox is a bit like a regular sandbox, except with no sand, no children, and no discernible fun. Instead, it is essentially a programme — normally running for several months — that allows early-stage fintech start-ups to test out their offerings in a limited market environment, under regulatory supervision, but without having to be fully licensed. That might sound pretty harmless. In practice, it's not. Regulators' primary role is to protect consumers — often, ironically, precisely from the kind of "financial innovation" the companies in the sandbox are offering — and to safeguard financial stability. It is not regulators' job to provide start-ups with free marketing or any kind of stamp of approval, which is how they are often being used (more on that later).

https://ftalphaville.ft.com/2018/12/05/1543986004000/A--fintech-sandbox--might-sound-like-a-harmless-idea--It-s-not/