A proactive Central Bank of Bahrain might be a formidable contender to Dubai when it comes to emerging as a dominant digital asset centre when one thinks of cryptocurrency in the Middle East.
Global cryptocurrency exchange mogul, Binance, decided to establish an advisory board in Dubai in December 2021. However, Binance does not possess a fully licensed exchange in the United Arab Emirates.
Binance does possess a fully regulated exchange in the neighbouring Kingdom of Bahrain, as the Gulf country takes the lead as the local cryptocurrency centre as per a recent CNN report.
According to Talal Tabbaa, the CEO of CoinMENA, cryptocurrency firms are congregating in Bahrain as it already possesses banking regulations for digital assets in place. In addition, CoinMENA is an exchange licensed by the Central Bank of Bahrain.
The Proactive Central Bank of Bahrain
Unlike several other central banks that have banned cryptocurrency as a payment medium, the Central Bank of Bahrain permits eminent banks to collaborate with cryptocurrency exchanges enabling easy fiat on and off-ramps for its clientele.
According to a CNN report, the Central Bank of Bahrain maintains a stance inverse to the ideologies of the Central Bank of the United Arab Emirates (CBUAE), which does not distinguish cryptocurrency as a medium of payment. However, Talal Tabbaa, the CEO of CoinMENA, acknowledged that if banking was organised, then Dubai could emerge as the number one spot for cryptocurrencies.
Central banks prevail as an enormous international obstruction to cryptocurrency adoption. The reason is straightforward – they cannot control the capital in the way that they do with their sovereign currencies due to cryptocurrencies’ de-centralised nature. As a result, central banks in India, the United States of America, China, the European Union, the United Kingdom, and Thailand have all newly barred or been very difficult about cryptocurrency and digital assets.
The Central Bank of Bahrain remains in the spotlight for its open-mindedness. Governor Rasheed M Al-Maraj told CNN that in retaliation to the maturing demand for digital assets, the Central Bank of Bahrain had been one of the Middle East’s initial adopters in the digital assets domain.
BeInCrypto reported in January 2022 that the Central Bank of Bahrain efficaciously accomplished an assessment run by utilising the JPM Coin.
Dubai remains thwarted by its central bank
Dubai still focuses on emerging as a cryptocurrency hub. However, the fiscal services provider – the Dubai Multi Commodities Centre (DMCC), has established a special economic zone (SEZ) for cryptocurrency-centric projects, which ensures zero taxes and accessible visa entrée.
CEO Ahmed Bin Sulayem stated that Dubai would be the weakest link for the United Arab Emirates. Therefore, it could not dominate Bahrain. Hence, Sulayem noted that he would instead maintain a flourishing cryptocurrency ecosystem in the medium to long run than haste into the domain and compete head-on with the Central Bank of Bahrain.
Dubai could be a flawless region for a cryptocurrency hub in the Middle East, however, Bahrain is already pacing ahead of the former.