Bahrain, once the financial center of the Middle East, is trying to regain its position. It allows cryptocurrency companies to work in the country. Bahrain can become another small jurisdiction that is open to the cryptocurrency market.
Dalal Bouheji, the business manager of the Bahrain Economic Development Board, is positive that the country’s central bank will issue guidelines for regulating the cryptocurrency industry although it has not named any deadlines.
The Central Bank allows companies to “test their solutions on a limited number of users and with a limited number of transactions,” says Buheji. “The goal of the program is to find a quick way for companies to enter the market.” she added.
Bahrain may soon emerge as a global cryptocurrency exchange hub as the government is enabling a ‘regulatory sandbox’ for cryptocurrency exchange. The Sandbox licence is a type of regulatory framework that is being adopted by the central banks to allow fintech firms to showcase their technology through lighter capital and entry requirements.
Khalid Saad, Chief Executive Officer of Bahrain Fintech Bay said “The decision to regulate, monetize or legitimize it as a legal tender will be subject to a decision of the regulator which is the Central Bank of Bahrain.”
“There are seven entities that have entered the Regulatory SandBox, four of these are cryptocurrency exchanges. We will study the functioning of these exchanges and then define the rules that are needed to regulate them.” an official informed. Each of these companies will work on a trial basis for nine months while the central bank will explore possibilities for regulating the cryptocurrency industry.
The official also said “As of now we recognize cryptocurrency as a commodity that can be traded in the exchanges. We are not considering it as a legal tender in any form.”
It is to be noted that the economy of Bahrain suffered greatly from the decline in oil prices in 2014.