Regulations in the cryptocurrency sector have been a thorn in the wound for various governments with financial regulators not knowing which direction to take. But for Bahrain, the Central Bank of Bahrain has seen the need to release a draft of regulations after putting in place a regulatory sandbox.
Before releasing the legal framework, the CBB had put in place a regulatory sandbox to test run the efficiency of the rules.
“After getting insight from the Regulatory Sandbox, we had put in place we are happy to report the sandbox provided us with the relevant data for shaping these rules.” Khalid Hamad executive director of banking at CBB. “Furthermore, the framework will address the demands coming from the crypto sector.”
The Aim of the Releasing Legal Frameworks
For Bahrain, the legal frameworks will be put in place to help in licensing players in the industry and further provide supervision to the licensed industry players. Besides oversight, the laws will help maintain high standards of technology, take care of cybersecurity risks and most importantly protect the interest of crypto enthusiasts within its borders.
Besides putting in place regulations to control the cryptocurrency sector in Bahrain, the new developments corresponds with Bahrain agenda of becoming the regional banking and business hub. Similarly, the regulatory sandbox put in place was also providing space for fintech industry players to test their solutions in the financial sector. Furthermore, the draft regulations cement the sentiments of Khalid Al Rumaihi CEO of the Kingdom Economic Development Board. Last year in September he divulged Bahrain is looking into adopting digital currency fully. Moreover, the government’s efforts led to a bitcoin exchange expressing interest into opening its doors in the country.
Similarly, according to information on news outlet, CCN Bahrain is also keenly watching the developments of blockchain technology the pillar of the industry. And to ensure it’s at the forefront Bahrain reached out to other like-minded financial agencies including the central bank of Singapore pitching their idea about adopting distributed ledger technology.
Apart from Al Rumaihi, Dr Abdulhussain Mirza Minister for Bahrain’s Electricity and Water Affairs urged the private sector in the country to embrace blockchain technology. Mirza believes blockchain technology can be used to safeguard transactions but also comes in handy at protecting the data. Furthermore, the technology can be adopted in any industry making it available for every player in the private sector.