Once a hub for the financial services industry in the Middle East, Bahrain has been losing out to other Gulf nations, particularly Qatar and the United Arab Emirates, in recent years.
Perhaps trying to recover some lost ground, the small island nation is going to be introducing cryptocurrency regulation in the near future.
According to Bloomberg, Bahraini authorities are going to allow cryptocurrency companies to work in the country for a trial period.
During that time, local financial regulators are going to look at how they can develop regulation for digital assets.
News that the Gulf state is trying to attract cryptocurrency firms won’t come as a surprise to many in the digital assets space.
It was only two months ago, after all, that the Central Bank of Bahrain issued some draft regulations for the cryptocurrency industry, with the consultation period ending on December 31.
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The regulator’s trial period is set to last nine months. Twenty-eight firms have received approval to operate in the Gulf state during that time.
Bahrain – catching up with Malta and Gibraltar
Amongst them is the SprinkleXchange – a company that will operate a blockchain-based exchange. The company’s platform will allow companies to list in a manner akin to a traditional stock exchange.
Bahrain is not the only small nation to try its hand at attracting cryptocurrency firms to its shores.
As most countries in the world are yet to formulate any rules governing the nascent industry, a number of tiny jurisdictions have stepped forward in an effort to attract bigger players before anyone else can.
Most notably, Gibraltar, which was one of the first jurisdictions to embrace online gaming in the 1990s, has created a distributed ledger technology, or DLT, license for companies working in the blockchain space.
Malta has also embraced the technology and put forward a number of regulatory measures designed to attract blockchain firms to set up shop in the island nation.