Cryptocurrencies in Bahrain: best practices and models

The Persian Gulf countries have long been an example for other states as the most loyal to cryptocurrencies and new technologies. We have already talked about how blockchain and digital finance have affected the UAE economy. This article will focus on Bahrain.

In March 2022, the Kingdom of Bahrain became the first Middle Eastern country to grant the Binance cryptocurrency exchange the right to conduct operations within its borders. The government has expressed interest in the development of the fintech sector and today cryptocurrencies in Bahrain are the subject of discussion at the highest levels.

Unlike its closest neighbors, Bahrain does not have significant oil reserves, and therefore, with the development of the economy, it focuses more on the tourism and banking business. Entering the cryptocurrency market for Bahrain is another way to diversify its economy. And thanks to its vast experience in financial and banking operations, Bahrain can count on significant advantages when adapting to blockchain technologies.

The Central Bank of Bahrain has developed a number of regulations and guidelines that will help to carry out any activity related to crypto assets without hindrance. But exchanges and financial projects wishing to offer their services related to cryptocurrencies need to undergo a thorough data check to comply with Bahraini legislation. Despite its loyalty to crypto-currency projects, the Central Bank of Bahrain is quite strict about everything related to crypto operations and trade. The country has introduced strict rules to combat any cases of financial fraud using cryptocurrency. The Central Bank of Bahrain has the authority to assess whether a crypto asset is suitable for use in the country.

After receiving prior written permission from the Central Bank, licensees must provide regulated crypto asset services only for approved crypto assets. Licensees who wish to use crypto assets in addition to those already approved as part of the application process must notify the Central Bank of their intention to do so and provide all relevant information related to the crypto asset; the exchanges on which it is traded, as well as additional systems and controls that the licensee has or will install to manage risks.

So, who can engage in cryptocurrency-related activities in Bahrain? People living in the country, working with clients and companies registered in Bahrain. Taxes are levied on cryptocurrency transactions in this country, but the Central Bank does not prohibit storing income in cryptocurrency assets, although it does not recognize them as an official means of payment and exchange.

Bahrain is one of the most actively developing fintech centers in the world. The country attaches great importance to financial and banking activities, which make a significant contribution to its GDP. In an effort to expand its capabilities, the country seeks to enter the cryptocurrency market and dominate it. With the help of regulatory measures and control over the work of blockchain and crypto companies, Bahrain may well become one of the main cryptocurrency hubs of the Middle East, and at the same time try to change the attitude towards digital currencies in the world.

IslamicCoin is the first project to provide the community with powerful financial technology that allows for seamless transactions, support innovation and charity. The project is 100% compliant with Sharia law and benefits the community. Developers focus on sustainable development and use technology and innovation to ensure financial sustainability.

"At the heart of Islamic finance is the prohibition on charging interest. Islamic finance has always been focused on not shifting most of the risks to one side of the financial relationship. In Islamic finance, balance and transparency of transactions should be observed, which can negatively affect our society," says Mohammed AlKaff AlHashmi, one of the founders of IslamicCoin.

IslamicCoin is aimed at 1.1 billion Muslims using the Internet. The project creates convenient tools designed for users who have never been owners of cryptocurrencies. Thus, the creators of IslamicCoin are expanding the capabilities of the Muslim online community by providing it with opportunities to use a new form of digital money and involving them in the modern digital world.