When one thinks of crypto in the Middle East, Dubai usually comes to mind as the major digital asset hub, but may be another contender for that accolade due to an active central bank.
Global crypto exchange giant Binance last December decided to set up an advisory body in Dubai, but it does not have a fully licensed exchange in the United Arab Emirates.
According to a recent CNN report, it has a fully regulated exchange in neighboring Bahrain, however, the Arab nation is leading as the regional crypto hub.
According to Talal Tabba, CEO of Coinmena, an exchange licensed by the Central Bank of Bahrain (CBB), crypto companies are coming to Bahrain because it already has banking regulations in place for digital assets.
Active Bahrain Central Bank
Unlike most other central banks that have outlawed crypto as a payment method, the CBB allows established banks to work with crypto exchanges enabling easy fiat on- and off-ramp for customers.
According to CNN, the stance of Bahrain’s central bank is in stark contrast to that of the United Arab Emirates (CBUAE), which does not recognize crypto as a means of payment. Tabba acknowledged that “if banking was sorted out, Dubai could be the number one destination for crypto.”
Central banks remain the biggest global barrier to crypto adoption and the reason is simple – they cannot control capital the same way they can with their sovereign currencies. Central banks in China, India, the US, the European Union, the UK and Thailand have recently banned or are very critical of crypto assets.
CBB is the one that stands out among the rest, as Governor Rashid M al-Maraj told CNN:
“In response to the growing demand for crypto assets, the Central Bank of Bahrain has been one of the early adopters of the Middle East in the crypto assets space,”
In January, CBB successfully completed a test run using JPM Coin, as reported by BeInCrypto.
Dubai is stunned by its own central bank
However, Dubai still aims to become a crypto hub. Financial services provider Dubai Multi Commodity Center (DMCC) has set up a Special Economic Zone (SEZ) for crypto-related projects that promises zero taxes and easy visa access.
Nevertheless, CEO Ahmed bin Sulayem has been critical of the slowdown displayed by the UAE Central Bank.
“We can only move at the pace of the weakest link in the UAE, we cannot overtake them. I should have a successful crypto ecosystem in the medium to long term, rather than rush into it and lock horns with the central bank. ,
Dubai may be the perfect location for a crypto hub in the Middle East, but it looks like Bahrain is already ahead.