As the digital asset market is making its way through Arab markets, the (United Arab Emirates) UAE has tried desperately to recruit cryptocurrency companies to call Dubai their Middle Eastern home. Despite its efforts, it seems to be losing to its tiny, little known neighbor, Bahrain.
Binance, one of the world’s largest and heavily trafficked crypto exchange platforms, recently got the green light to take the steps to become a fully regulated, centralized crypto exchange in Bahrain; a huge win for the UAE’s biggest crypto hub threat.
Bahrain is an archipelago nation of 83 islands, 33 of them being man-made. It’s a cash rich country with lax finance laws and a legacy crypto financial infrastructure. This combination may provide a haven for crypto companies who are trying to host business outside of heavily regulated western markets.
In a chat with CNN, one crypto CEO praised the country as a potential landing spot for the Arab crypto hub.
“Unlike the UAE, [Bahrain] has banking regulation for crypto in place, and that is why crypto companies in the region are setting up there,” said Talal Tabbaa, the CEO of CoinMENA, an exchange licensed by the Central Bank of Bahrain (CBB) told CNN.
As a resident of the UAE, Tabbaa spoke on his home country’s lack of organzation when it comes to creating a crypto infrastructure and guideline for operation in the country’s financial system.
“If banking [in the UAE] was sorted, then Dubai could be the number one destination for crypto,” said Tabbaa.
The CBB allows digital assets as an official method of payment. They also allow banks to use crypto exchanges so that their account holders can withdraw and deposit their money simply. Unlike other countries, the responsibilities of establishing a crypto market is up to the banking system in Bahrain, not securities regulators. El Salvador, the country who has hedged all bets on Bitcoin, is currently the only nation to recognize the digital asset as a legal tender.
Bahrain’s financial sector makes up 17% of GDP outside of oil. After creating crypto processes in banking back in 2019, they set themselves apart from other nations around the Gulf that were looking to push their cities as digital asset friendly.
Countries around the world have reacted to crypto’s emergence on their financial markets differently. China banned all crypto currency transactions, the UK banned Binance’s operations in their country, and the US has been rumored to come out with overhauling regulations on a wild-west style market in the states.