In a move that brings the Middle East and North Africa region to the cryptocurrency grid, the regulatory license was granted to Palmex, the first exchange to be set up in this traditional oil-trading region.
The Regulatory Sandbox Licence was issued by Bahrain’s Central Bank (CBB). The exchange will now offer a legal ecosystem for digital currencies which operated sans such regulations in the region.
Palmex is owned by ArabianChain technologies, one of leading companies in the region in financial technologies and digital assets. CEO of ArabianChain, Mohammed Alsehli, stated that license now bestowed on Palmex the opportunity to offer users and traders regulated framework for all operations. The move will add confidence among users, legitimacy and also give a layer of legitimacy to users.
Alsehli added that “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.”
In the first phase, ArabianChain would test the ecosystem by inducing a limited number of selected users to test as well as optimize the processes, before implementing the further expansion.
By definition, a sandbox is a framework provided to such technology companies to establish their products, especially when they are innovative and need to be tested in real market times. They can test the products, platforms, services and business models among the live audience, but yet operate in an environment which is always under control.
The risks to customers, as well as the financial systems in use, are all mitigated. This will allow regulators to offer to oversee the actions and also to anticipate, predict the likely loopholes and provide regulator cover for such issues.
Coveted Licence
Palmex induction as the region’s first exchange has come after rigorous authentication and processing. The requirements for the issue of the licence were strictly considered and verified in the different security systems. It is also seen that the policies, controls, and processes used in the system were always well protected.
The main aspect which the company will have to be careful, during the regulatory sandbox period is that all of the rules of CBB are followed. These include “Know Your Customer (KYC)” and all types of the misuse of money instruments.
These include the “Anti-Money Laundering and Countering Financing of Terrorism,” and recommend that the companies always follow the process of ‘appropriate disclosure.” Along with protection, compensation requirements and all related matter of the customers.
