The world’s largest cryptocurrency exchange by trading volumes, Binance Holdings Ltd., has been granted an in-principle agreement by The Central Bank of Bahrain. The agreement allows Binance to become a crypto-asset service provider in the Kingdom of Bahrain, making CBB the first regulator in the MENA region to grant an entity of Binance such an approval. In applying for a license, the exchange plans to become a centrally regulated cryptocurrency exchange.
The exchange has faced increased scrutiny from regulators in the UK, US, China, and Europe due to its opaque operating structure. However, it has been on the lookout for a new global headquarters while striving to improve its relationship with regulatory authorities. In addition to expanding its presence in the Middle East, Binance is attempting to take advantage of the growing acceptance of cryptocurrencies in the region.
Binance commented, “The in-principle approval from CBB still requires Binance to complete the full application process, which is expected to be completed in due course.” However, Binance’s licensing will be “a matter of formalities” once it completes the establishment requirements, said Abdulla Haji, Director for Licensing at the Central Bank. In his view, setting up its regional headquarters in the kingdom would be a good fit for the exchange.
Taking advantage of the rise in acceptance of cryptocurrencies in the Middle East, Binance seeks to expand its presence in the Middle East. Recently, a preliminary agreement was signed between the company and the Dubai World Trade Center Authority in order to establish a virtual asset hub in Dubai. The development comes just a day after DWTC said it would establish a specialized cryptocurrency zone, joining the ranks of a cryptocurrency regulator.
Albeit being the Gulf’s smallest economy, Bahrain has been one of the early adopters of digital asset spaces in the Middle East, with Rain Financial to become the first licensed crypto-asset platform in 2019. In the first half of 2021, Rain Management’s trading volume is reported to have grown 20-fold to reach $1 billion for the first time. Manama-based CoinMENA scored another license from Bahrain’s monetary authority earlier this year.
According to CoinMarketCap, cryptocurrencies are valued at almost $2.4 trillion in the market, as of December 2021. The world’s first and biggest cryptocurrency, Bitcoin, has recovered some ground above $50,000 after dropping the past few weeks. Many experts predict the Bitcoin price to pass $100,000, although opinions differ as to when.