On the importance of creating a conducive regulatory framework to foster an investment-friendly environment
Which developments in the global crypto-asset market are shaping investment opportunities for exchange firms in Bahrain?
MOHAMED KHALID ATEEQ: One of the most significant developments is the growing demand for compliant and regulated crypto-asset firms. This has led investors to seek out platforms that operate within regulatory frameworks and adhere to compliance standards when trading crypto-assets. Bahrain has taken a leading role in this regard by establishing a regulatory framework for crypto-assets in 2019. This framework provides a safe and secure environment for investors and has helped to attract a significant amount of investment to the crypto-asset segment.
In April 2023 Bahrain saw a sizeable increase in the average daily volume of crypto-assets received, indicating a shift towards more regulated and safer players in both the regional and the global market. As a result, there are new opportunities for crypto-asset exchange firms in Bahrain to establish themselves as trusted and reliable platforms for investors.
Overall, the crypto-asset market is a dynamic and rapidly evolving space, presenting ongoing investment opportunities for exchange firms both in Bahrain and beyond. By prioritising compliance and regulation, and staying ahead of emerging trends and technologies, firms in Bahrain can position themselves for success in this challenging yet rapidly growing industry.
What regulatory frameworks and compliance measures should exchange firms in Bahrain consider when seeking to expand their investment offerings to global investors?
ATEEQ: Crypto-asset firms in Bahrain can refine their strategies to mitigate risks associated with market volatility and security threats by implementing several measures. These are mandatory requirements by the Central Bank of Bahrain and include maintaining adequate liquidity, as well as adopting risk-management tools. Additionally, it is essential for such firms to implement robust security measures, such as multi-factor authentication and secure wallets, in order to safeguard against potential security threats.
In what ways can risk-mitigation strategies be integrated into investment opportunities?
ATEEQ: Crypto-asset licences in Bahrain are mandated to frequently assess the different types of risks associated with the industry, and promptly incorporate any necessary changes in companies’ risk-management measures. Additionally, these licences can play a vital role in educating investors and customers about risk management and navigating the volatile crypto-asset market. These efforts can help build trust with investors and attract more local and global investment. Rain, as a crypto-brokerage platform, is implementing these initiatives in order to reinforce its security measures.
How can cryptocurrency exchange firms in Bahrain expand their investment opportunities?
ATEEQ: The regulatory framework in Bahrain for the crypto-asset industry is advanced and robust, making it an ideal environment for crypto-asset exchanges. Regulators, such as the Central Bank of Bahrain, and entities responsible for strategic development and innovation such as the Bahrain Economic Development Board and Bahrain FinTech Bay, have collaborated to create an agile regulatory framework. This presents an opportunity for companies to develop crypto-asset projects in Bahrain, fostering innovation and attracting investment. By adhering to these regulatory frameworks, crypto-asset exchanges can offer a secure and stable investment environment that is attractive to global investors, key players and potential partners.