FinTech in Seychelles 2021: Innovations to make the country an international hub
There are numerous initiatives underway in Seychelles to foster innovation in FinTech, including digital assets and services. The Central Bank of Seychelles (CBS) has embraced the rapid pace of Fintech, while ensuring it is properly regulated and subsequently help payment service providers to leverage technological innovations in the financial sector to maximize economic growth.
The Central Bank of Seychelles (CBS), furthermore, has identified that Financial Technologies (FinTech) can enhance the evolution of the financial sector, especially in areas identified in the Financial Sector Development Plan for both the onshore and offshore financial sectors. The CBS is leading efforts to formulate a National FinTech Strategy for Seychelles, in collaboration with the Ministry of Finance, Trade, Investment, and Economic Planning and the Financial Services Authority.
Aiming to become a FinTech Hub
Needless to say, these initiatives are expected to go a long way towards establishing the status of Seychelles as the main regional FinTech hub servicing not only the offshore sector and on a Pan-African basis, but also other potential international regions, focusing on digital financial markets in the areas of properly regulated digital exchanges, digital marketplaces, digital custody, digital banking, and P2P platforms.
With a population of just over 98,000, Seychelles is well placed to embrace the 4th industrial revolution of digital FinTech enablement. With fewer people, the smart automation that digital transformation provides, aligned with the existing financial services base, can catapult the economy into being the ‘Singapore for Africa’. It is clear that the underlying building blocks are already in place, compared to numerous other regional players who simply market the fact that they are or will be new FinTech hubs or International Financial Centres (IFCs).
From recent experience, we have observed that there is more ease of business and less protectionism in place than some regional rivals, therefore, allowing new FinTech business enablers to come in and flourish. As such there is less concern about the immediate OECD downgrade, as this is a short term adjustment that is being addressed with the new alignment. As far as EU white lists, grey lists and blacklists go, why should any entity be granted the right to subjectively decide which country fits in which bucket?
In any case, digital banking, digital payments and the introduction of Central Bank Digital Currencies (CBDCs) will reduce the reliance on any single systems. And whilst the challenges of conforming to differing regulatory jurisdictions will remain, competition and reduced costs will allow bilateral trading between nations to flourish where the relationships are on a fairer footing.
Whilst Seychelles has no immediate plans to introduce a CBDC, we can see it being a necessity sooner rather than later at the rate it is beginning to develop. It is easy to introduce one, given the technology exists to facilitate it, but how it is used across the value chain, both for retail and wholesale activity is what will really define the value. We have no doubt that when the time is right, this is the approach which will be adopted, assuming the building blocks are in place to utilise it.
We can already see FinTech businesses being attracted to the jurisdiction, including companies, with external talent working alongside local talent both onshore and offshore to create a knowledge-based economy, which is very much underway. That’s not to say that more work does not need to be done to ensure that there is growth and sustainability, but the stage has been set and the seeds have not only begun to sprout but are also beginning to bear fruit.
Africa has huge potential and Seychelles, if it continues to make the right decisions at a macro level with cohesion between different financial bodies, parastatals, and the private sector, can be at the forefront. Adopting a collaborative approach, which helps foster financial development across Africa through being able to service it digitally, is the right strategy.
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