Bahrain Central Bank Launches Regulatory SandBox for Cryptocurrency Service Trials

The central bank of Bahrain has recently announced its blockchain regulatory sandbox to help the new and upcoming crypto service providers to operate in the country. The recent sandbox would act as a trial for the regulators looking into making cryptocurrency and blockchain services legal within the country.

In December 2018, the central bank issued a draft proposal to potentially license and regulate digital asset and services. But, it is being speculated that the actual framework might take some time to be put in place. In the meantime, the recent regulatory sandbox would help the new crypto startups and firms to operate within the country without fearing the regulator backlash.

The report published by the central bank suggests that the trial period would be for the 9-months and it would help both the parties, the crypto service provides and the regulators to observe and draft the final framework.

Crypto Regulatory Sandbox: A win-win situation for Everyone

Dalal Buhejji, the business manager of Bahrain’s Economic Development Board during his interaction with the media revealed that the sandbox approach would help the crypto-offering firms to make a trial run of their product and services to a limited number of users and complete a limited number of transactions to test the operations. A total of 28 companies have been selected for the sandbox trials.

The aim behind the movie is being seen as to end the excessive dependence on the country’s oil reserves. 2014 saw the prices of oil go down by almost half, making it difficult for the Gulf countries who are heavily dependent on their oil reserves for their economy, to keep a check on their mounting debt. Most of the Gulf nations are looking for other alternatives to balance the sliding economy and blockchain seems to have come in as a savior.

Blockchain: A Savior for Debt-Ridden and Troubled Nation

Bahrain saw the potential in blockchain technology back in 2017 and since then they have been actively endorsing its various use cases in day-to-day life. Bahrain inaugurated its first Blockchain economy back in November 2018 to train its community and form better blockchain strategies in the national interest.

Bahrain is not the first nation which has looked towards blockchain to take them out of their misery. Venezuela which has been plagued by a disastrous economy and inflation levels almost made their currency worthless, they turned towards blockchain and crypto. Although their attempt at creating a national cryptocurrency in the form of petro failed miserably, Bitcoin has come in as a savior.

Final Thoughts

The latest initiative by the central bank of Bahrain is a clear indication of another country opting for the blockchain when every other measure failed to lift them up from their distress. This is not just a significant achievement but a potential revolution on the brink of breaking out.

According to a recent finding, cryptocurrency is legal in almost 111 countries while outright illegal in only 10. So, we can conclude that the analysts who predicted Blockchain to be a tool of the next industrial revolution were not far from the truth.