The Central Bank of Bahrain has granted Binance, the world's largest cryptocurrency exchange by trading volumes, an in-principle agreement to become a crypto-asset service provider in the kingdom.
The CBB's move makes it the first regulator in the Middle East and North Africa region to grant such an approval to a Binance entity.
The exchange's licence application is part of its plans to become a fully-regulated centralised cryptocurrency exchange.
"The in-principle approval from CBB still requires Binance to complete the full application process, which is expected to be completed in due course," Binance said on Monday.
Binance, which has its headquarters in the Cayman Islands and Seychelles, has faced increased scrutiny from the regulators in the US, UK, Europe and China, largely due to its opaque operating structure. However, the company has been trying to improve its relationship with regulators and has been on a hunt for another location for its global headquarters.
Binance has also sought to expand its presence in the Middle East as it seeks to cash in on the rising acceptance of cryptocurrencies in the region.
The company signed a preliminary agreement with the Dubai World Trade Centre Authority last week to develop an industry hub for global virtual assets in the emirate. The development came a day after the DWTC said it will be setting up a specialised crypto zone, while becoming a regulator for virtual assets and cryptocurrencies.
Bahrain has been a fast mover in adopting financial technology. It issued draft rules to regulate cryptocurrencies in December 2018, which were finalised two months later. The country also provided licences to digital assets exchanges CoinMena and Rain Management earlier this year.
These come as crypto adoption in the region picks up pace.
Rain Management said that its trading volumes grew 20-fold during the first half of 2021 to more than $1 billion for the first time.
Binance Holdings is also reportedly in discussions with Indonesia’s richest family, the Hartonos, and state-owned telecom operator PT Telkom Indonesia to set up a cryptocurrency trading exchange, Bloomberg reported. The move would help spur wider adoption of cryptocurrencies in the South-East Asian nation.
The market capitalisation of cryptocurrencies is at almost $2.4 trillion as of Monday, according to CoinMarketCap. Bitcoin, the world's first and biggest cryptocurrency, regained some ground above $50,000 after dropping in the past weeks.
