Bahrain is set to open its doors to cryptocurrency related companies as the country aims to become a crypto and blockchain hub. Their operation would first be on a trial basis as the country figures out appropriate regulations for the industry.
Bahrain Welcomes Crypto Firms
Bahrain, which was once famed as the middle east centre for the financial industry is set to rise to prominence again through the crypto and blockchain industry. The country will be opening its borders to crypto related firms though the country does not have clear regulations for the industry yet.
The Business manager at Bahrain’s Economic Development Board, Dalal Buhejji noted that she is confident the Central Bank of Bahrain will issue a necessary guideline for the industry, though she gave no specific timeline. Previously, the central bank had stated it issued a consultation paper on draft regulations for crypto assets platform operators.
The blockchain industry in the country is still nascent, and considering the absence of clear legal bindings for the crypto and blockchain businesses, a model is being sought from smaller jurisdictions that have been more open to regulating the market such as Malta, Liechtenstein, and Gibraltar.
Buhejji also stated that the central bank allows companies to test their solutions on a limited number of users with a limited number of transactions. The purpose of this program according to her is to help the firms to find a quick way to enter the market.
At the moment 28 companies have received approval to work under the central bank’s so-called regulatory ‘sandbox’. One of such companies is SprinkleXchange, an initial public offering platform built on the blockchain. Each of the firms is to work on a trial basis for nine months as the central bank looks at appropriate regulations as time goes on.
Bahrain’s economy is the smallest among the six members of the oil-rich Gulf Corporation Council. It was hit by the decrease in the price of crude oil since 2014 and its allies pledged $10 billion in aid to support the economy last year.
Crypto Adoption and Regulations
Appropriate regulations have aided crypto adoption in markets such as Malta, Liechtenstein, Gibraltar, among others. The absence of appropriate friendly regulations for crypto firms would make them migrate to an environment that is more suitable.
Providing a suitable environment for cryptocurrencies has become the pursuit of most countries in the world at the moment as they seek to annex the dividend of the industry.