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The Kingdom of Bahrain has come up with an initial framework to govern the expanding realm of cryptocurrencies. The Central Bank of Bahrain (CBB) issued a set of draft rules earlier this week, setting the precedent for regulating the burgeoning asset class.

In a statement released to the media concerning this latest and widely appreciated move, Khalid Hamad, Executive Director of CBB’s banking supervision,  said: “This regulatory framework will address the demand from the market for these services and the need to also recognize this innovation in financial services. The CBB’s experience with the participants within the Regulatory Sandbox was insightful in shaping these rules.”

The “sandbox”, as stated by Hamad, refers to Bahrain FinTech Bay (BFB) where businesses from all over the world can test their new innovations under lenient and flexible regulations so long as they meet certain criteria.

The aim of this initiative is to set a mutually beneficial platform where companies can come and develop innovative FinTech solutions without having to bother much about stringent regulations. This, in turn, will help Bahrain in becoming a hotbed for technological innovation and entrepreneurial success.

Launched in Feb 2018, BFB currently has nearly 30 firms actively pursuing blockchain technology and its offshoots that include cryptocurrencies and digital payments.

CBB’s comprehensive regulatory framework is optimized to include all requirements for licensing and financial resources, while at the same time addressing other key aspects such as safeguarding technology standards, cybersecurity, and investors’ interest.

The CBB has already made the draft consultation paper on its website and is accepting feedback on the same through the rest of the year.