Business 22 February 2019Erik Gibbs
Bahrain looks to become a global crypto, blockchain hub
Bahrain has had a keen interest in cryptocurrencies for a while, even if it hasn’t moved quickly to adopt the technologies. The Middle Eastern country is now looking to make its mark on the crypto ecosystem and is beginning to welcome companies with open arms in an effort to become the next big crypto and blockchain global hub.
Bahrain is a suitable choice as a hub for the future’s currency. It was once the center of the Middle East’s financial industry and could soon reclaim that title. It is ready to open its borders to crypto-related firms, which would be allowed to operate on a trial basis as the country works out the logistics of how to regulate the industry.
Those regulations are most likely coming soon. The business manager for the country’s Economic Development Board, Dalal Buhejji, has expressed her belief that the Central Bank of Bahrain (CBB) will introduce the necessary framework in the near future, but didn’t comment on how soon this could happen, according to a Bloomberg report. The central bank has already issued a consultation paper meant to be the basis of draft regulations for crypto asset platform operators in the country.
There are already several global crypto hubs popping up around the world – Gibraltar, Liechtenstein and Malta are three countries that have been more than willing to embrace the future. Those hubs could eventually be used as the foundation of any regulations implemented in Bahrain.
Buhejji adds that the central bank currently allows crypto-based entities to test their developments on a limited basis using a limited number of transactions. This allows the bank to view the activity and will ultimately help the companies enter the market quicker.
Last July, the CBB issued a sandbox license to the Palmex crypto exchange, marking a first for the entire Middle East-North Africa (MENA) region. The bank has included more companies in the sandbox since then, and there are now 28 entities approved to run trails in accordance with the sandbox. All companies are allowed to operate for a nine-month period while the CBB continues to hash out the details of the regulatory guidance.
Bahrain is the smallest country out of the six that make up the Gulf Corporation Council. It has been dealing with a decline in revenues following the decrease in the price of crude oil since 2014, and has turned to its allies previously for economic support. Last year, those allies pledged $10 billion in aid. However, as the country looks to return to autonomy, it is ready to embrace crypto and blockchains, which will undoubtedly drive its economy higher for decades to come.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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