In the past few years bitcoin and several other such currencies have seen something of a boom that even nay sayers have had to witness with rapt attention. The phenomenon gone from being about that currency those internet nerds were raving about to an investment opportunity that made people into millionaires. Now more and more people are investing in cryptocurrency with the various currencies of this type getting more traction in terms investments and transactions.

But as the cryptocurrency trend becomes more mainstream, the need arises for governments around the world to construct laws to regulate it. Several countries in the west have been steadily legitimizing cryptocurrency assets by passing legislations that are specifically targeted towards regulating the industry. Most Asian countries have somewhat lagged behind, and the middle eastern countries don’t fare any better.

Bahrain leading the way

But things are looking up for cryptocurrency owners living in Arab countries with Bahrain becoming the first country in the region to come up with regulations. The Central Bank of Bahrain has recently issued a ruling on crypto assets and its regulation. This ruling not only pertains to the licensing and governance of these assets but also goes beyond into the territory of anti-money laundering regulation and risk management.

The bank ruling also sets up regulations for the avoidance of conflicts of interest and cyber security. These are expected to go a long way in ensuring the protection of both the crypto assets and the individual to own them. By becoming the first country in the Arab world to give a metaphorical nod and sign of acceptance to cryptocurrency assets, Bahrain has secured its position as a leader in this new asset category.

The role of the Central Bank of Bahrain

Considering the rate at which people across the world are jumping on the cryptocurrency bandwagon, this new regulation is a strategic move on the part Central Bank of Bahrain. By introducing measures to protect and regulate the crypto asset class, the Bank intends to attract more clients in to its fold. At the same time, the bank also realizes the risk potential of these assets of left unregulated as well as the vulnerability of the owners to cyber-attacks.

By having regulations in place for all parties involved in crypto investments and transactions to adhere to, the Central Bank intends to offset and minimize unforeseen risks. There are even stipulations included in the ruling for insurance against threats theft or cyber-attack. As it currently stands, this ruling is meant to position Bahrain’s Central Bank in a custodial role with a majority of the focus on ensuring the security of the crypto wallets.

Bahrain has taken the first steps towards ensuring some governmental oversight in protecting the emerging asset class of cryptocurrency. But while this small nation aims to become the leader in the crypto industry in the Arab world, it faces stiff competitions from many other countries in the region. Qatar, UAE, and Saudi Arabia have all taken some steps in the direction of legitimizing the crypto ecosystem. Time will tell if this ruling will help Bahrain regain its former position as the banking leader of the Arab world.