Bahrain used to hold the Olympic torch of the financial industry centre of the Middle East. To try and recover this status, the local authorities are thinking of the best way to regulate the digital coin industry and are letting crypto platforms work in Bahrain on a temporary basis.
The central bank’s role
Earlier, Bahrain’s central bank created a draft on regulatory rules for the crypto asset field – more specifically, crypto firms – in the country. Now, the institution is expected to issue actual rules, as confirmed by a rep of the local Economic Development Board, Dalal Buhejji.
Presently, the market of crypto focused companies and firms working in the blockchain area is largely unregulated and lacks licenses. However, small countries, such as Malta or the Bermuda Islands, are managing to introduce state support and regulation of these areas, so companies operating in these areas are heading there to work.
The crypto sandbox
Presently, the central bank in Bahrain permits foreign companies to trial their technological solutions on a strictly limited amount of customers and with a small number of transactions too. This is being done to help those companies to enter the market quickly.
At the moment, nearly 30 companies have gotten permission to work in Bahrain for about 9 months using the government-made sandbox. They are allowed to operate while the central bank is working on the rules for crypto regulation.
One of these companies is SprinkleXchange, a platform for launching IPOs. Currently, it has ten cap listings on it.
Current economic state in Bahrain
Bahrain is the smallest state among the six members of the Gulf Cooperation Council. The drop in oil prices in 2014 gave it a hard blow. In 2018, its allies provided $10 bln to help support the local economy.
It is quite cheaper to run a business in Bahrain than in other parts of the world, experts believe.