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Central Bank of Bahrain announces new fintech regulatory sandbox
The Central Bank of Bahrain announced new regulations to create a fintech regulatory sandbox that will allow fintech startups to test and experiment banking ideas and solutions.
The fintech regulatory sandbox will offer opportunities for businesses around the world to expand and thrive in the Gulf and strengthens Bahrain’s position as a fintech and financial services hub in the GCC, the release stated.
Offering a virtual space for fintech companies to test their innovative solutions, the framework is open to existing licensees of Bahrain Central Bank and other local and foreign companies. These tests last for nine months, with a maximum extension of three months.
“The regulatory sandbox will enable industry players to apply innovative Fintech products while maintaining the overall safety and soundness of the financial system; We are pleased with the introduction of this regulation, which sets a very forward-looking policy that adapts with the times,” said Mr. Khalid Hamad, Executive Director of Banking Supervision, said.
The bank has recently issued Regulatory Sandbox Framework directive that includes the eligibility criteria, filing requirements and timeline for the process. Recently the Bahrain Economic Development Board (EDB) announced a partnership with fintech incubator and ecosystem builder Singapore Fintech Consortium in order to develop fintech ecosystem and regulatory framework.
“The launch of the regulatory sandbox is an initiative that follows on the directives of HRH the Crown Prince to prioritize innovation that supports sustainable high value job creation in the Kingdom. In order to grow the fintech industry, we know we need to create an ecosystem in which entrepreneurs can innovate and test their ideas – and the introduction of Sandbox regulations is one of the key steps towards ensuring that environment,” H.E. Khalid Al Rumaihi, Chief Executive of the EDB, stated.