Crypto exchange Binance will provide fully regulated services to its first country in the Middle East, thanks to a license granted by Bahrain’s central bank.
Bahrain was able to issue the license to the world's largest exchange through the Cooperation Council for the Arab States of the Gulf (GCC). CEO Changpeng Zhao announced the crypto-asset service provider license on Monday.
#TeamBahrain.#Binance has been granted the first license for a global crypto-asset provider in The Cooperation Council for the Arab States of the Gulf (GCC) by the Central Bank of Bahrain. pic.twitter.com/Ndnb4xhA5y— CZ Binance (@cz_binance) March 14, 2022
Binance’s new license allows it to offer crypto services, including trading, custody and portfolio management for customers in the Middle East’s smallest economy. Last December, Binance received an in-principal approval to operate in Bahrain. That approval has now become a full-fledged license.
Central Bank of Bahrain (CBB) Governor HE Rasheed Al Maraj said that the bank was “developing regulations aligned with global trends” that “enable innovation and best practices.”
The license allows Binance to continue its expansion efforts across global jurisdictions while complying with local regulations. Last week, CZ stated that he wanted Binance to “identify and invest in” traditional businesses in every economic sector worldwide with the express intent of tying them into cryptocurrency.
Despite its relative size to other countries in the region, or possibly due to that, Bahrain has been one of the most crypto-friendly countries in the Middle East. The CBB successfully trialed JP Morgan’s crypto payment system Onyx in January.
Cointelegraph reported on Jan. 10 that using crypto-based payment systems will help the CBB address what Governor Al Maraj called “existing inefficiencies in the traditional cross-border payments industry.”
Landing licenses to operate in each region will certainly help Binance achieve its goals in that respect. Its most recent notable acquisition was news media publisher Forbes last month for the princely sum of $200 million.
The CBB’s move also arguably puts the country ahead of Dubai as the region’s crypto hub. Bahrain’s financial crypto regulations are certainly ahead of those in Dubai, which does not yet allow crypto exchanges to offer services to its residents.
However, CEO of Bahrain-based crypto exchange CoinMENA, Talal Tabbaa, told CNN in February that although the central bank has more advanced crypto regulations now, "If banking was sorted, then Dubai could be the number one destination for crypto."
The banking issue in Dubai may be sorted this year as United Arab Emirates (UAE) Prime Minister Sheikh Mohammed bin Rashid Al Maktoum created a legal framework for crypto in Dubai. Cointelegraph reported that the Prime Minister said the framework would protect investors and design “much-warranted international standards” for crypto industry governance.