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Bahrain once stood as the Middle East’s center for financial industries. Now the tiny Gulf nation is attempting to regain that status by allowing companies using cryptocurrencies to operate in the country on a trial basis while it figures out how to regulate them, Bloomberg reports.
Business manager at Bahrain’s Economic Development Board Dalal Buhejji says she is confident the central bank will issue guidelines, though gave no indication of a timeline. The central bank has stated that it previously released a consultation paper on draft regulations for crypto exchanges.
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The lack of legal clarity in most of the world’s economies is forcing cryptocurrency and blockchain-related businesses to seek clarity from smaller jurisdictions like Malta, Gibraltar and Liechtenstein. Bahrain is looking to capitalize on this and strike while the iron is hot.
The Bahraini central bank allows companies "to test their solution on a limited number of users, with a limited number of transactions,” Buhejji explained. She added that the purpose of the program is for companies to find a quick way into the market.
SprinkleXchange, an IPO platform built on the blockchain, is one of 28 companies granted approval to operate within the country. According to the so-called regulatory sandbox, the companies are allowed to operate on a trial basis for nine months while the central bank determines potential regulation.
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