The Central Bank of Bahrain has launched a sandbox for companies offering crypto and blockchain related services within its territory, according to Dalal Buhejji, business manager at country’s Economic Development Board.
Buhejji told Bloomberg that the sandbox is a preliminary step as the banking authority works on providing suitable regulations for the new industry.
Companies accepted into the sandbox are allowed to operate within Bahrain for the next nine months while testing their products “on a limited number of users, with a limited number of transactions.”
If the authorities are satisfied with the activity of the company after the stipulated period, then they are likely to get licensed when the country formalizes its regulation for crypto and blockchain related companies.
The sandbox would give these new companies easier access to the Bahrain market according to Buheji.
However, Bahrain is putting regulations in place with the goal of attracting cryptocurrency and blockchain startups to set up businesses within the country. The existence of these new age companies with their territory will likely boost economic activities and probably afford the country some extra revenue to offset its current budget deficit.
By opening its border to blockchain talents, Bahrain would be following the steps of nations like Malta, Switzerland, and Belarus who have unveiled a crypto regulatory framework in the last couple of months.
These seemingly smaller nations are capitalizing on the delay in regulating the crypto and blockchain industry in more prominent countries such as the U.S, China, India, and South Korea.
As time has proven, providing clear regulations within a national boundary usually attracts blockchain startups, protect investors and help boost economic activities to an extent.
Meanwhile, we recently reported a similar development in Lithuania where the Central Bank updated its crypto and ICO regulatory framework to reflect current market realities.
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