March 31, 2023

Bahrain’s Central Bank Issues New Amendments for Crypto-Asset Market

Bahrain’s Central Bank Issues New Amendments for Crypto-Asset Market Featured Image

Bahrain bitcoin flag, national flag cryptocurrency concept black background

The Central Bank of Bahrain (CBB) announced new amendments to its crypto-asset module after consultations with industry stakeholders.

The new amendments aim to cope with the continuous developments in the crypto scene to comply with the industry’s best practices alongside boosting investors’ protection, according to a statement by the Bahraini central bank. The bank’s move comes as a part of its plan to develop the crypto-assets market in line with the Kingdom’s Economic Recovery Plan.

Under the new amendments, the Bahraini central bank included “Digital Token Offerings” to be a part of its framework for regulated crypto-assets activities, therefore the bank will regulate all offers of digital tokens that exhibit the characteristics of the security.

The bank will determine to what extent the digital token security is by checking its structure, characteristics, and the underlying economic purpose of digital tokens, as well as the rights attached to the digital token.

The new amendments allow crypto-asset licensees to engage in additional activities which are not within the stipulated regulated crypto-asset services after obtaining the bank’s approval. They also include new requirements aimed to promote safeguarding clients’ assets to provide high levels of protection for investors.

In this regard, Director of the Capital Markets Supervision Directorate Abeer Al Saad expressed her happiness in issuing new amendments to our regulatory framework for crypto-assets to fairly and transparently regulate the crypto-asset market.

“The CBB has adopted a risk-based regulatory approach towards requirements, which are proportionate and commensurate to the regulated activity undertaken by a licensee. We endeavor to provide adequate safeguards to investors without inhibiting innovation adoption at the CBB, as we continue to monitor market trends and review the regulatory framework to keep up with the latest developments in the field, as well as maintain the competitiveness of the sector,” Saad noted.

She added that the new regulations are a reflection for the bank’s leading role in regulating this market.

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