When one thinks of crypto in the Middle East, Dubai usually comes to mind as the dominant digital asset hub, but there could be another contender for that accolade due to a proactive central bank.
Global crypto exchange giant Binance decided to set up an advisory body in Dubai last December but it does not have a fully licensed exchange in the United Arab Emirates.
It does have a fully regulated exchange in neighboring Bahrain, however, as the Arab nation takes the lead as the regional crypto hub according to a recent CNN report.
Crypto companies are flocking to Bahrain as it already has banking regulations for digital assets in place, according to Talal Tabbaa, the CEO of CoinMENA, an exchange licensed by the Central Bank of Bahrain (CBB).
Proactive Bahrain central bank
Unlike most other central banks that have outlawed crypto as a payment method, the CBB permits established banks to work with crypto exchanges enabling easy fiat on and off-ramps for customers.
According to CNN, the Bahraini central bank’s stance is in complete contrast with that of the United Arab Emirates (CBUAE), which does not recognize crypto as a means of payment. Tabbaa acknowledged that “if banking was sorted, then Dubai could be the number one destination for crypto.”
Central banks remain the biggest global obstacle to crypto adoption and the reason is simple – they cannot control the capital the same as they can with their sovereign currencies. Central banks in China, India, the U.S., E.U., U.K., and Thailand have all recently banned or been very critical of crypto assets.
The CBB is one that stands out among the rest, as Governor Rasheed M Al-Maraj told CNN:
“In response to the growing demand for crypto assets, the Central Bank of Bahrain has been one of the Middle East’s early adopters in the crypto assets space,”
In January, the CBB successfully completed a test run using the JPM Coin, as reported by BeInCrypto.
Dubai stymied by its own central bank
Dubai still aims to be a crypto hub, however. Financial services provider the Dubai Multi Commodities Centre (DMCC), has set up a special economic zone (SEZ) for crypto-related projects which promises zero taxes and easy visa access.
Nevertheless, CEO Ahmed Bin Sulayem has been critical of the lethargy exhibited by the United Arab Emirates Central Bank.
“We can only go at the pace of the weakest link in the UAE, we cannot overrun them. I’d rather have a successful crypto ecosystem in the medium to long term than rush into it and lock horns with the central bank.”
Dubai could be the perfect place for a crypto hub in the Middle East but it appears that Bahrain is already streets ahead.
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