The regulation acknowledges four primary types of tokens
Pursuant to the regulation, the corporate form of a CPO is restricted to being a Bahraini joint stock company. Foreign crypto-asset exchange licensees, however, may be licensed in Bahrain provided that the applicant maintains management presence and premise(s) in Bahrain.
In addition, the applicant is required to maintain a professional indemnity insurance coverage of a minimum of BHD 100,000; and must have an appropriate cybersecurity policy.
The regulation divides the types of crypto-asset services into four categories, each with a different minimum capital requirement and a different set of services that the crypto-asset operator may provide.
The first category, and one with the lowest capital requirement, is for reception and transmission of orders and provision of investment advice in relation to accepted crypto asset services. The minimum capital requirement for a licensee of this category is BHD 25,000. At the other end of the spectrum is the operation of a licensed crypto-asset exchange and provision of crypto-asset custody services. The minimum capital requirement for this category is BHD 300,000.
Time To Launch
The regulation provides that a CPO licensee must commence operations within six months from receiving the approval from the CBB or risk having the decision withdrawn. Following receiving CBB approval to commence the offer of services, the licensee is required to retain an independent third party to create a readiness assessment report.
The regulation also provides two primary types of crypto wallets by CPO licensees, a custodial crypto wallet that restricts clients from having full control of their assets since the licensee is the designated custodian of the clientâs private keys, and a non-custodial crypto wallet that provides clients with full control of their assets.
The CBB is the first banking regulator in the GCC to finalize regulations for crypto-assets. At the time of this article, Rain Management W.L.L is the only licensed crypto asset services provider in the Kingdom of Bahrain.