The central bank of Bahrain has kicked off a consultative process on cryptocurrency platforms in the kingdom by publishing the relevant draft regulations.
According to the Bahrain News Agency, the draft rules — which target the operations of crypto-asset platforms — aim to provide a regulatory framework for the supervision and licensing of these services. Additionally, the draft rules contain measures aimed at safeguarding the interests of customers, cybersecurity risk management, and technology standards.
“This regulatory framework will address the demand from the market for these services and the need to also recognise this innovation in financial services. The CBB’s experience with the participants within the Regulatory Sandbox was insightful in shaping these rules,” the executive director of banking supervision at the Central Bank of Bahrain, Khalid Hamad, said in a statement.
The Central Bank of Bahrain (CBB) expects to have received feedback on the draft cryptocurrency regulations by the last day of this year.
Bahrain Wants to Be an International Fintech Hub
This comes at a time when Bahrain has identified the fintech sector as crucial in helping the kingdom become a regional business and banking hub. Towards this end, the kingdom has launched a regulatory sandbox to allow financial institutions licensed by the CBB and other firms to “test their technology-based innovative solutions relevant to Fintech or the financial sector in general.”
In September last year, the CEO of the Kingdom’s Economic Development Board, Khalid Al Rumaihi, disclosed that Bahrain was keen on adopting cryptocurrencies and that a bitcoin exchange had already shown interest in setting up shop in the constitutional monarchy.
Besides cryptocurrency, Bahrain has also been keen to adopt blockchain technology. Last year in February, Al Rumaihi stated that the constitutional monarchy was in talks with the central bank of Singapore and others with a view of adopting distributed ledger technology and becoming a regional leader in the space, as CCN reported at the time:
“Blockchain will unlock so many different possibilities for business in the way email and internet did years ago. What would prevent Bahrain from becoming a leader in this space in the same way Singapore is?”
‘True Mark of Progress’
And three months ago, Bahrain’s electricity and water affairs minister, Dr. Abdulhussain Mirza, called for the adoption of blockchain technology by the private sector in the country:
“Technologies such as blockchain take us a huge step forward in finding a secure way to facilitate transactions,” Mirza said. “Blockchain’s ability to protect user’s data is a true mark of progress, because it can be applied in different companies from different industries including cybersecurity.”