A regulatory sandbox license has been granted to Palmex making it the first digital currency exchange in North Africa and the Middle East to do so. Bahrain?s central bank granted Palmex the license and this set the stage for a possible nod from banks and regulators. Palmex was unveiled last year in October by ArabianChain Technology with a view to serving the North Africa and Middle East region. It is the first digital assets exchange in the region offering low trading fees, rigorous security measures, multiple digital currency pairs and advanced trading tools.
Besides launching the first decentralized public blockchain in the MENA region, ArabianChain Technology has also issued a digital token known as DubaiCoin (DBIX), the first minable and tradable decentralized virtual currency in Arabia. The sandbox license that Palmex has received will become effective on July 15, 2018. The license creates a safe space that allows both established businesses and startups to test and refine business models, platforms, services and products in a live environment which is controlled. In such a situation risks to the broader financial system and clients are mitigated thus buying regulators time to fine-tune the legislation as necessary.
Rigorous application process
In order to get the license Palmex had to undergo an application process which was rigorous in order to verify the controls, processes, policies and systems that are in place in order to protect customers. During the regulatory sandbox period firms are under obligation to adhere to the regulations set by Central Bank of Bahrain and this includes anti-money laundering and know-your-customer policies. Additionally firms must also follow the appropriate compensation, protection and disclosure requirements relating to their clients.
Bahrain?s central bank launched the financial technology regulatory sandbox last year in June with a view of allowing startups in the fintech sector to test new financial and banking business models. Initially a limited number of users will be allowed to use the service before it is rolled out to everyone else. According to the chief executive officer and founder of ArabianChain Technology, Mohammed Alsehli, the number of trades is expected to increase and this will also spur token-based fundraising in the region.
Disclaimer: Nothing in this article should be construed as financial advice in any way, nor as an encouragement to engage in cryptocurrency trading activity. This article was not sponsored by any entities or companies mentioned in the article. The only purpose of this article is to inform/educate on the topics discussed in the article.
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