The Central Bank of Bahrain continues its efforts to place the Kingdom at the forefront of the world in terms of financial services technology (fintech) by launching and studying a group of new initiatives aimed at discovering possible and promising opportunities in this sector.
The Financial Technology and Innovation Unit prepared a study to evaluate the feasibility of launching an expansive experimental environment, “Scale Box,” that enables qualified Regulatory Sandbox graduates to continue their business operations in an experimental environment subject to the bank’s supervision and within specific standards under its authority, with the aim of supporting new financial technology solutions that have not yet been established. Clear regulations have yet to be developed for it. The Unit presented the study to the members of the Committee for Evaluating Applications for the Regulatory Experimental Environment, and based on the outcomes of the committee’s discussions, the Unit decided to re-examine this proposal, taking into account the legal and licensing challenges associated with the proposal.
If the project is launched, this will be the second regulatory sandbox in Bahrain, as in 2017 the Central Bank of Bahrain launched the sandbox regulatory sandbox framework for financial technology, which allowed companies to test their technical solutions for up to a full year under the supervision of the relevant authorities. The regulatory sandbox in Bahrain represents the first initiative of its kind in the region, and provides financial technology companies with a valuable opportunity to expand and flourish in the Gulf region. To qualify to join the experimental regulatory environment, the proposed solutions must be innovative, useful to customers, and technically tested, and the companies must have the intention of publishing and implementing the service in the Kingdom of Bahrain after the end of the trial period.
Since its launch, the regulatory sandbox has nurtured many innovative financial technology companies. The “Tarabut” portal became the first company to successfully complete the experimental regulatory environment phase, and it is currently cooperating with a wide range of financial institutions in the region in introducing open banking technologies. The initiative also provides small businesses with a safe and partially regulatory-free environment, while simultaneously strengthening Bahrain’s position as a leading financial services hub in the GCC region for companies of all sizes.
The Central Bank of Bahrain also established a general framework to facilitate innovations in the field of financial technology and established the Financial Technology and Innovation Unit to ensure the application of the best regulatory oversight for the sector and the optimal implementation of financial services in the Kingdom of Bahrain.
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