UAE crypto firm is first to win regulatory sandbox licence
Palmex granted licence by Bahrain Central Bank; says part of a process to verify security systems, policies, and controls to protect customers
Palmex, a digital asset exchange powered by ArabianChain Technology, has become the first and only cryptocurrency exchange in the Middle East and North Africa to receive a regulatory sandbox licence.
The Central Bank of Bahrain (CBB) granted the licence to Palmex, setting the stage for acceptance by regulators, banks and currency exchange houses in the region that have been weary of transacting with digital currencies.
A regulatory sandbox is a framework and process that facilitates the development of the financial technology (fintech) industry in a safe and calculated way.
ArabianChain founder and CEO Mohammed Alsehli 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 in 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."
He said ArabianChain will start with a limited number of select users to test and optimise the process before expanding.
The sandbox creates a virtual safe space in which both startups and established businesses can trial and refine innovative products, services, platforms and business models in a live but controlled environment, where risks to customers and the wider financial system are mitigated, giving regulators time to adapt legislation as needed.
Palmex said its licence, which goes into effect on July 15, is part of a rigorous application process that verified its security systems, policies, processes and controls to protect customers.
Alsehli said: “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.”