Bahrain has become the first country in the Middle East and North Africa to introduce concrete steps to regulate the burgeoning domestic cryptocurrency market. The Central Bank of Bahrain (CBB), the Kingdom’s regulatory body for banking and financial services, has issued draft regulations aimed at licensing and governing “Crypto-asset Platform Operators.”
The CBB has confirmed that the new regulatory framework will be added to Volume 6 of the CBB Rulebook meant for Capital Markets.
Per the new regulations, crypto asset platform operators based out of overseas jurisdictions are eligible to obtain a license and operate in Bahrain. CBB will be the apex body overseeing the process, and it will grant licenses after ensuring that the applicant’s services are in line with existing Bahraini laws and the new regulatory framework.
All crypto-related businesses operating in Bahrain must maintain a minimum capital worth BHD 500,000 (USD 1,329,790).
As for investors, CBB’s new regulations make it mandatory for entities to be duly incorporated in Bahrain before being able to trade cryptocurrencies. Overseas businesses have to be complying with the laws of the home jurisdictions. Individual investors are also allowed to trade so long as they are above the age of 21.
Additionally, CBB will also take several other factors into account before issuing licenses to crypto asset platform operators, including their technology infrastructure, commitment to ensuring cybersecurity, an adequate mechanism for timely reporting and notifications, and such.
The draft guidelines are currently open for public consultations and will likely undergo improvisations before being enforced.
