The Central Bank of Bahrain has opened a regulatory sandbox for fintech firms worldwide to test their technology ahead of live deployment in the Kingdom.
The framework provides a virtual space for companies to test their technology, and is open to existing CBB licensees and other local and foreign firms. The testing duration is nine months, with a maximum extension of three months.
Bahrain is following in the footsteps of other regulators across the world in creating an ecosystem designed to encourage and help fintech startups get their products to market.
It follows the creation of a partnership between the Bahrain Economic Development Board (EDB) and the Singapore Fintech Consortium and asset management and advisory firm Trucial Investment Partners to develop a startup-friendly regulatory framework for the Kingdom. The initiative is intended to pave the way for increased interaction between fintech firms in the Middle East via Bahrain and those in Asean via Singapore and facilitate the entry of Singaporean Fintech companies into the Kingdom.
H.E. Khalid Al Rumaihi, chief executive of the EDB, says: “In order to grow the fintech industry, we know we need to create an ecosystem in which entrepreneurs can innovate and test their ideas - and the introduction of Sandbox regulations is one of the key steps towards ensuring that environment. Bahrain has always been an attractive proposition for fintech - particularly due to our unique offering in areas such as Islamic finance and payments, and we are looking forward to welcoming more local, regional, and international fintech firms.”
Bahrain provided greater opportunities for fintech businesses in 2014, when the CBB initiated two new license types - payment services and card processing services - marking the entry of non-banking companies into banking services. To date Bahrain has issued 14 licenses for these two activities.