The Central Bank of Bahrain plans to test a Bitcoin payment processing and payout solution. The solution will be launched in partnership with OpenNode. An official press release from the central bank said that the Bitcoin payment processor would be used to offer the infrastructure needed to support the solution.
Central Bank of Bahrain to test Bitcoin payments
Bahrain launched a regulatory Sandbox in 2017, after which the central bank supported using OpenNode to be part of the framework enabling financial technology companies to test ideas and solutions within the country. OpenNode believes the move will transform Bahrain, the Middle East, and the entire Bitcoin economy.
The CEO and Co-founder of OpenNode, commented on the use of its infrastructure by the Central Bank, saying that OpenNode was a leading Bitcoin infrastructure solution that continued to support countries, governments, and reputable financial companies that wanted to adopt the Bitcoin standard and conduct transactions through the Lightning Network.
The Bitcoin payment solution would be part of the digital economy of Bahrain within a regulated sector. Using the technology will go a long way in enabling Bahrain to support digital asset payments in the country.
The executive director of the Investment Development for Financial Services in the Bahrain Economic Development Board, Dalal Buhejji, said the initiative would soon enter the testing phase. He added that the initiative was crucial and stressed the need for innovation while adhering to the regulatory guidelines.
Crypto regulations in Bahrain
Bahrain currently stands as one of the most crypto-friendly countries globally, with its friendly regulatory framework attracting several cryptocurrency companies. After years of reluctance to embrace crypto initiatives, Gulf countries such as Bahrain are warming up to the industry, and they currently account for a high volume of crypto transactions.
Bahrain’s support for crypto projects has attracted some leading centralized exchanges globally. Binance, the world’s largest exchange by trading volumes, received a crypto-asset service provider license from the Central Bank. The license allowed the exchange to expand its operations in Bahrain. Several other leading exchanges have also shown interest in operating in the country.
Bahrain also made history as the first country in the Middle East that approved the Binance exchange to provide fully regulated services via the Cooperation Council for the Arab States of the Gulf (GCC).
Besides Bahrain, the other Gulf state that has also shown interest in cryptocurrencies is the United Arab Emirates (UAE). The UAE region has attracted a lot of crypto interest, with the friendly crypto regulatory framework also attracting leading crypto firms such as Binance, Coinbase, and FTX.
The launch of the Dubai economic free zone and the launch of VARA as the cryptocurrency market regulator in Dubai have been behind rising cryptocurrency activities in the country. Crypto firms are moving into the country to leverage the friendly crypto regulations and tap into the crypto-savvy market that has embraced digital innovations.
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