Bahrain introduced new cryptocurrency regulations
After releasing draft proposals on licensing and regulation of the crypto assets in December 2018, the Central Bank of Bahrain has issued a finalized cryptocurrency regulation on February 25th.
The new regulatory guidelines are mostly based on conflict of interest avoidance, reporting, licensing, governance, and risk management. Additionally, the regulation also extensively covers Anti-Money Laundering and Counter-Terrorist Financing measures, along with cybersecurity.
Cryptocurrency exchanges licensed by the country’s central bank will also have to respect guidelines regarding order matching, pre and post-trade transparency, market manipulation and abuse avoidance, as well as conflicts of interest.
In a significant new development regarding cryptocurrency exchanges, the central bank’s regulation specified that every new customer should be onboarded in accordance with Know Your Customer (KYC) laws. Additionally, every crypto exchange operating in Bahrain will also have to ensure that safe encrypted custody wallets would always be able to be retrieved.
With the new regulations, Bahraini authorities made another step towards further development of the cryptocurrency-related businesses in the country. In fact, Bahrain has always been considered one of the friendliest countries in the region when it comes to blockchain and crypto adoption. For instance, even before the official regulations have been issued, the country’s central bank has launched a regulatory sandbox, which still allowed cryptocurrency companies to operate under clear conditions.