The Central Bank of Bahrain (CBB) has recently issued regulations on cryptocurrencies, according to a recent press release on TradeAabia English Local Media.
The call for a regulatory framework started last year with the central bank initiating proposals for regulating and licensing digital asset exchanges in the country.
The new regulations will cover areas bordering around “licensing, governance, minimum capital, control environment, risk management, AML/CFT, standards of business conduct, avoidance of conflicts of interest, reporting, and cyber security for crypto-asset services.”
The rules also encompass new supervision and enforcement standards that will include guidelines provided by blockchain platform operators as principal agents, portfolio manager, adviser and as a custodian around Bahrain and environs.
This, therefore, compels all cryptocurrency exchanges under Central Bank of Bahrain license, to consider guidelines about “order matching, pre and post-trade transparency, avoiding market manipulation, and market abuse, including conflicts of interest.”
Also, considering the risks involved in dealing with crypto assets, the new regulations also offer additional measures which include:
- The provision of enhanced due diligence (EDD) for new clients to ensure that they have adequate knowledge of the use and safety of wallet.
- Ensuring that “keyman risks” are adequately insured with the right insurance firm.
- Making sure that all encrypted custody wallets can be retrieved at any time.
Bahrain continues to be one of the most friendly countries for cryptocurrencies and blockchain technology.
In January, the University of Bahrain reportedly partnered with a blockchain startup to issue diploma certificates via blockchain
Also in September, Coinfomania reported that the Bahrain Central Bank issued a financial certification to a swiss fintech firm for business expansion in the Middle East. With the certification, the firm will be able to launch its virtual currency and Sharia-compliant crypto exchange in the region.