The race to become the next cryptocurrency hub in the Gulf region has intensified in recent years, with Bahrain and the United Arab Emirates leading the pack. According to a report by American online publication Stratfor, UAE’s capital Abu Dhabi has especially strived to portray itself as the one-stop shop for all crypto enthusiasts. The two nations have issued licenses to crypto companies, developed crypto-friendly regulation and even invested in crypto startups.
Bahrain and Abu Dhabi stand out in a region where many countries have been cautious regarding cryptos. Kuwait’s central bank prohibits trading in cryptos while Qatar issued a warning last year to all commercial banks against dealing with crypto businesses. Oman and Saudi Arabia have urged their citizens to be cautious when dealing with cryptos.
However, for Bahrain and Abu Dhabi, cryptos have been central to their plans. The two are working to present themselves as the best alternative to the expensive global crypto hubs such as London, New York and California. Citing a study by ZPX, a Singaporean crypto firm, the report revealed that setting up a crypto company in London or New York could cost as much as $750,000. However, in Bahrain, it only costs $200,000, with Abu Dhabi being even lower.
Bahraini policy makers have been on a quest to make life easy for crypto operators. A month ago, the Bittrex-backed Rain announced that it had become the first fully regulated on-shore crypto exchange in the Middle East and North African region. The exchange, which raised $2.5 million, received a regulatory license from the Central Bank of Bahrain after graduating from the bank’s regulatory sandbox. The exchange operates within the Bahrain FinTech Bay, a co-working space and accelerator that receives financial backing from the central bank and other wealthy private backers.