Dubai, 12th June 2018 – Palmex has become the first sandbox-regulated crypto exchange in the entirety of the Middle Eastern and North African region.
In a move that it is hoped will facilitate the future trading of digital assets in a safe, secure, and regulated environment, its new badge of respectability is being viewed by many as a hugely positive step forward for crypto trading in the territory.
The Regulatory Sandbox License is awarded by the Central Bank of Bahrain (CBB). Created in accordance with the country’s sandbox regulation framework, it is hoped its adoption by crypto enterprises will set the stage for acceptance by regulators, banks, and currency exchange houses in the area, which have thus far shown themselves wary of transacting with digital currencies.
A regulatory sandbox is a process intended to facilitate the development of financial technology in a safe and carefully managed manner. Meant to resolve the regulatory ambiguity that so often accompanies these technologies, it is an effective way of ensuring that compliant services are brought to the market.
Speaking on the landmark award of the license to Palmex, Mohammed Alsehli, ArabianChain founder and CEO, said:
“When we launched Palmex, we did so with the conviction that regulatory status is fundamental to our future and the future of the industry. Our team has put a lot of time and resources into working with regulators to ensure we are compliant, and we are excited to give our users an added level of confidence in using Palmex with this extra layer of legitimacy. ArabianChain will start with a limited number of select users to to test and optimise the process and then expand the rest.”
Essentially, this sandbox acts to create a virtual safe space, in which both fledgling enterprises and more established ventures are able to trial and refine their products, services, platforms, and business models, in a real world yet carefully regulated environment. The effect is to mitigate any and all risks to consumers and the overarching financial system, whilst also granting regulators the necessary time to adapt legislation as needed.
For Palmex, the award of this license will come into effect from 15th July, following a rigorous application process that assessed everything from the exchange’s security systems to its policies, processes, and controls.
This move on the part of the Bahrain Central Bank heralds a new wave of forward-thinking regulation pertaining to digital asset trading within the region. Geared towards developing an environment in which fintech innovation and inclusion is both supported and promoted, its focus is on guarding the nation, banking system, investors, and consumers from any detrimental fallout without suppressing the technology entirely.
“As the only regional digital asset exchange with a Sandbox license, we expect to see a significant rise in awareness and adoption, driving a huge spike in the number of trades and token-based fundraising across the region while maintaining the safety of the financial system. The wild fluctuations and phenomenal surge in valuation of cryptocurrencies like bitcoin have continued to drive exponential growth in demand to trade and issue digital assets. The region has been eagerly waiting for a regulator-approved platform that makes it possible for them to buy and sell in a secure environment. Palmex is set to play a key role in disrupting the traditional financial system as we continue to fuel the region’s innovation-driven economy and the global blockchain industry.”
Lead image from Pixabay