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Bahrain-based cryptocurrency exchange Rain has obtained a full regulatory license from the Central Bank of Bahrain and has opened its doors for trading.
The exchange also closed its $2.5 million seed round and stated it has become the ‘first cryptocurrency exchange to earn a regulatory license in the Middle East.’
The round was co-lead by BitMEX Ventures and Kuwait-based cryptocurrency fund, Blockwater. Other regional participants include Vision Ventures, 500 Startups MENA, and Taibah Valley.
Yehia Badawy, co-founder of Rain told Zawya that the funding proceeds will be used to support growth of product offerings and services as it plans to ramp up institutional offerings.
“We’ve seen tremendous interest from institutional clients whether family offices, high net worth individuals, or traditional financial institutions. The main concern was around regulation, and now that this has been in place, we are ready to kick start this part of the company,” he said in a telephone interview.
Talking about expansion plans, Badawy said: “We are speaking with several entities in the region to achieve regulatory compliance with the different jurisdictions. Starting off in Bahrain has been great, and now we’re looking to expand through different regulatory bodies in the region.”
As for what supported the regulatory licensing for Rain, Badawy said: “For us as a company, security of our systems and client funds is the number one priority. So as we worked with the regulators, they saw that we have the right checks and balances, that we have the systems in place to be compliant, and that we are running a secure and user-friendly exchange.”
However, he noted that a fine balance between regulation and innovation needs to be in place.
On how the regulatory development might impact the rate of investments in the financial technology sector in the region, he said: “Traditionally you hear about regulation hindering innovation from reaching its full potential. I think we have a good balance where things are moving at a promising pace and then at the same time the regulatory aspect has been handled very well. As the ecosystem continues to develop, we’ll continuously see other success stories.”
Earlier this year, chief executive of Bahrain Fintech Bay told Zawya that Middle East fintech investments make up just 1 percent of the total global level, but cross-border collaboration will significantly boost the industry’s growth. Read more here:
(Reporting by Nada Al Rifai, editing by Seban Scaria)
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