Bahrain’s central bank is nurturing its burgeoning fintech scene with a two-pronged approach. The first focuses on graduates of its successful Regulatory Sandbox programme.

The Sandbox, launched in 2017, allows innovative startups to test their ideas in a controlled environment with relaxed regulations. Since then, 149 applications have been received, with 14 greenlit in 2023 alone.

However, exiting the Sandbox can leave fledgling firms in limbo. To bridge this gap, the Central Bank of Bahrain’s Fintech & Innovation Unit proposed a ‘Scale Box’ concept.

This intermediary stage would offer Sandbox graduates a chance to continue operating with relaxed rules but with higher transaction limits. Additionally, pre-scheduled meetings with regulators would help them navigate the licensing process.

While the committee liked the concept, legal and licensing hurdles prompted the FIU to refine its proposal.

The second initiative seeks to build a more comprehensive Fintech ecosystem. Dubbed ‘FinTech Bahrain,’ this ambitious project would function as a one-stop shop for aspiring fintech companies.

Combining elements of an incubator and a central access point, FinTech Bahrain would connect businesses with regulators, investors, and other stakeholders from both public and private sectors. This includes government agencies, educational institutions, and established financial players.

The proposal for FinTech Bahrain has been submitted to the CBB’s senior management, indicating a potential future where Bahrain fosters not just individual fintech ventures, but a robust and interconnected ecosystem.

Meanwhile, the Regulatory Sandbox continues to deliver success stories. As of December 2023, 23 companies have graduated, including notable names like open banking platform Tarabut Gateway and cryptocurrency exchange Rain Financial.

Notably, seven of these graduates have secured full operational licences from the CBB, paving the way for their sustained growth in Bahrain’s evolving financial landscape.

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