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Bahrain’s Finance and National Economy Minister Shaikh Salman bin Khalifa Al Khalifa announced that the country’s central bank is in the process of creating regulations for the issuance of stablecoins.
This move is anticipated to decrease transaction costs and improve financial inclusion.
The revelation came during a response to a query posed by legislator Hisham Al-Asheeri about the regulation of digital assets. Al Khalifa emphasized the Central Bank of Bahrain’s commitment to fostering a secure environment for digital asset trading.
The new regulations are aimed at mitigating risks associated with trading on unregulated platforms, which can be linked to money laundering and fraud.
Bahrain, recognized as a cryptocurrency-friendly nation, has previously granted licenses to cryptocurrency exchanges such as Coinmena and Binance.
This progressive approach has allowed businesses, including telecom operator Stc Bahrain, to start accepting cryptocurrencies. Nonetheless, there has been criticism regarding the lack of a comprehensive regulatory framework, which could deter more companies from adopting cryptocurrencies and stablecoins.
The proposed legislation intends to enhance the central bank’s ability to oversee and track blockchain-based transactions and activities of licensed entities. Al Khalifa highlighted that the central bank would have the authority to enforce administrative sanctions, restrict services, or even pursue criminal action against licensees who breach the new laws.
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