Strong regulations have been a fastidious problem that hindered development and adoption of digital currency all over the world. But as cryptos are becoming famous and significances of it becoming much apparent, regulators are doing everything possible to properly regulate rather than abrogating it. The most recent addition to the list is the Kingdom of Bahrain, a Middle East country, where the Central Bank has come out to issue a draft of rules regulating cryptos.
The Middle East has gradually turned into an enticing destination for Startups because of sufficient extraordinary infrastructure and geographical features. A report from Wamda Research Lab, the total number of MENA startups may double in the year 2020. Other places such as Dubai and Abu Dhabi are also investing massively to lift the growth of financial technology startups, according to Reuters.
The central bank of Bahrain (CBB) has released draft rules on trade in cryptos for consultation, preparing a framework to effectively digital assets as GCC nations seem to highly tap into those assets.
The Executive Director (ED) of Banking Supervision, Khalid Hamad, according to Bahrain News Agency, was quoted 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 experience with the participants within the Regulatory Sandbox (Bahrain FinTech Bay) was insightful in shaping these rules.”
As part of the diversification struggle, the guidelines have been issued to boost the number of firms, in order to cut the expenditure by the government via the use of technology.
The exhaustive draft regulatory framework brought by CBB will meet needs for licensing, financial materials and measures protect user interests, management measures, tech standards, and cybersecurity risk, according to the statement. The CBB put this draft consultation paper on its website for the public viewing, as it waits for the feedback before 2018 ends.
The Kingdom of Bahrain has been much emphasis on reinforcing fintech upheaval in the nation, some of the initiatives include the formation of Fintech Bay, which is a home of over 30 companies handling cryptos, the distributed ledger technology, digital payments plus other fintechs.