Bahrain plans to set up a regulatory sandbox for cryptocurrency projects so that blockchain testing may happen in a safe environment, under the aegis of the Economic Development Board.
"This [Regulatory Sandbox] is much like Singapore and what UK is looking at. This is not just talk. We have launched it. You can go to the website and application process is clear. We are open for business," said Khalid Al Rumaihi, Chief Executive, Economic Development Board of Bahrain.
He also noted Bahrain may soon have a Bitcoin exchange, as a Saudi Arabia company wants to expand to the small Persian Gulf kingdom. Rumaihi said the Central Bank of Bahrain is also involved in talks of starting the new exchange.
Bahrain hosted a MIT technological event this week, where new technologies, security and cryptography were mentioned, but also blockchain projects.
And while some governments seem more hostile to Bitcoin, other countries create a climate to grow blockchain companies. Switzerland is one of those countries, where regulation has allowed the creation of CryptoValley, an array of firms and projects in Zug. Canada and Australia have also fostered positive relations with the cryptocurrency community and government officials have spoken in positives about the new technology.
"I hate to be a regulator today. Because we are obliged to protect the consumers and customers. There is fear about funding and anti-money laundering. We are going to be looking through the Regulatory Sandbox allowing small-scale experimentation," said Rumaihi.
He added the country's Finance Ministry is also positive about cryptocurrencies and there was talk of the creation of investment instruments related to cryptocurrencies.
"Blockchain will unlock so many different possibilities for business in the way email and internet did years ago. What would prevent Bahrain from becoming a leader in this space in the same way Singapore is?" he said.
The Gulf states may soon become a hub for fintech companies as economic free zones allow for the fast and easy establishment of exchanges and other infrastructure. The UAE and Qatar are preparing their own frameworks to invite fintech projects.