Bahrain has set up a regulatory structure to allow financial technology companies to test products and services for a maximum of one year.
The regulatory “sandbox” is a virtual space for local and foreign companies to demonstrate their products prior to a roll-out in Bahrain.
“The regulatory sandbox will enable industry players to apply innovative fintech products while maintaining the overall safety and soundness of the financial system,” said Khalid Hamad, executive director of banking supervision at the Central Bank of Bahrain.
Bahrain began licensing non-banking companies to conduct financial activities in 2014, when it created licences for payment services and card processing services. It says it has issued 14 licences for these services so far.
Across the MENA region, regulators are struggling to strike a balance between fostering innovation in fintech without compromising the stability of the banking sector.
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