Regulations have been a critical hurdle that limited growth and adoption of cryptocurrency across the globe. But as cryptocurrencies are getting popular and the positives of it becoming more visible, regulators are trying their best to regulate it than eliminate it. The recent addition to this list is Bahrain, where the Central Bank has issued draft rules to regulate cryptocurrencies.
Bahrain crypto regulation to bolster Fintech in the country
According to the news published in the National, Bahrain’s central bank has issued draft rules on the trade in cryptocurrencies for consultation, setting up a framework to regulate virtual currencies as GCC countries look to increasingly tap into such assets.
With regards to the same Bahrain News Agency quoted Khalid Hamad, Executive Director of Banking Supervision saying that
“This regulatory framework will address the demand from the market for these services and the need to also recognize this innovation in financial services. The CBB’s [Central Bank of Bahrain] experience with the participants within the Regulatory Sandbox was insightful in shaping these rules,”
The “sandbox” in the statement refers to Bahrain FinTech Bay which made for companies to test ideas under tighter regulations. These guidelines are released with an aim of boosting the number of companies as part of diversification efforts to reduce government expenditure through technology.
The comprehensive draft regulatory framework introduced by the CBB will cover requirements for licensing, financial resources, as well as measures to safeguard client or customer interests, technology standards, and cybersecurity risk, management measures, the statement added. The draft consultation paper is available for viewing on the central bank’s website. The CBB is open to feedback on the draft rules until year-end.
Bahrain has been laying special emphasis to bolster fintech revolution in the country- the creation of Fintech Bay is one of those initiatives. The FinTech Bay, inaugurated in February, is home to about 30 firms working on cryptocurrencies, the blockchain, digital payments, and other financial technology.
The Middle East has slowly become an attractive destination for Startups due to the availability of superior infrastructure and geographical proximities. According to the latest report by Wamda Research Lab, the number of MENA startups is expected to more than double by 2020 from 2015. And it’s not just Bahrain, Abu Dhabi and Dubai are investing to boost the growth of FinTech start-ups.
With regulations in place, Will Bahrain become the “Silicon Valley “ for crypto businesses? Do let us know your views on the same.