• The tiny gulf nation of Bahrain will soon regulate crypto trading platforms
• Bahrain is trying to recover its lost status as the financial industry centre of the Middle East
• IPO operator SprinkleXchange has been approved to go live in Bahrain

In a bid to recover its status as the financial hub of the Middle East, Bahrain is officially inviting cryptocurrency companies to work in the country while they are still studying how to regulate them.

Central Bank exploring long term regulations

In a statement by the business manager of Bahrain’s Economic Development Board, Dalal Buhejji, she said that she’s confident the central bank will issue regulations. However, she did not specify any timeline on when it will happen. A consultation paper on draft regulations has also been published by the central bank for crypto-asset platform operators.

Bahrain’s attempt to draw in companies focusing on blockchain technology and cryptocurrency trading also comes as the sector is still largely unregulated and unlicensed in many global financial hubs. As a result, it forces adopters to seek clarity from smaller jurisdictions which have been more open to regulating the market. Some of them include Liechtenstein, Malta, and Gibraltar.

Buhejji also said that Bahraini central bank allows companies to test their solution on a limited number of users, with a limited number of transactions. She added that this will help in finding a quick way to enter the market.

SprinkleXchange, an initial public offering platform which has been built using blockchain, is just one of the 28 companies which has been approved to work under the central bank’s regulatory sandbox. For nine months, these companies will operate on a trial period while the central bank is still looking into long term frameworks.

In a statement by Chief Executive Officer Alexander Wallin, he said that the exchange which is run by New York-based Sprinkle Group SA, is about to go live this month. It will have an initial cap of 10 listings.

Rebuilding its status as a financial hub

As the smallest among the six members of the oil-rich Gulf Cooperation Council, Bahrain’s economy had been hit hard by lower crude prices ever since 2014. Last year, its allies have pledged $10 billion to support its economy.

Buhejji also said that compared to other regions in the area, the cost of operating a business in Bahrain is lower than in other nations in the region.