First sandbox-regulated MENA cryptocurrency exchange launched
By Jessica Combes / CPI Financials
The Central Bank of Bahrain has granted regulatory sandbox Licence to Dubai-based blockchain start-up ArabianChain in milestone move to empower safe, secure and regulated trading of digital assets
Palmex, a professional digital asset exchange powered by ArabianChain Technology, has become the first cryptocurrency exchange in the Middle East and North Africa (MENA) to receive a Regulatory Sandbox Licence.
The Central Bank of Bahrain (CBB) granted the Regulatory Sandbox Licence to Palmex under the sandbox regulation framework in the Kingdom of Bahrain, setting the stage for much-awaited acceptance by regulators, banks and currency exchange houses in the region that have been weary of transacting with digital currencies.
The regulatory sandbox facilitates the development of the financial technology (fintech) industry in a safe and calculated way. New business models enabled by fintech can create regulatory ambiguity. Therefore, regulatory clarity is critical to fintech innovators to bring compliant services to market.
“When we launched Palmex, we did so with the conviction that regulatory status is fundamental to our future and the future of the industry. Our team has put in a lot of time and resources into working with regulators to ensure we are compliant, and we are excited to give our users an added level of confidence in using Palmex with this extra layer of legitimacy. ArabianChain will start with a limited number of select users to test and optimize the process and then expand to the rest,” said ArabianChain founder and CEO Mohammed Alsehli.
In effect, the sandbox creates a virtual safe space in which both startups and established businesses can trial and refine innovative products, services, platforms and business models in a live but controlled environment, where risks to customers and the wider financial system are mitigated, giving regulators time to adapt legislation as needed.