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Bahrain taking huge crypto steps

Bahrain has become the first Middle Eastern-North African country to give Binance approval in principle to establish itself as a crypto-asset service provider

In January, the country’s central bank gave the go-ahead to CoinMENA Bahrain’s Bank ABC initiated real-time payments for Aluminium Bahrain (Alba) using the JPM Coin system Bitcoin dropped to a three-month low on January 7

Bahrain has become the first Middle Eastern-North African country to give Binance approval in principle to establish itself as a crypto-asset service provider.

Binance, the world’s leading cryptocurrency exchange by trading volume, still has to complete the full application process to acquire a license from the Central Bank of Bahrain. The company said in a press release it expects to complete the process in due course.

The developments are part of Binance’s plan to become a fully regulated centralized cryptocurrency exchange.

In 2021, Binance drew the attention of regulators around the world for its operations, with many saying it’s not authorized to conduct business in their jurisdictions. That prompted the company to recruit staff to bolster its compliance activities and said it plans to seek official approval in some countries.

Bahrain, for its part, is seeking to strengthen its crypto industry. In January, the country’s central bank gave the go-ahead to CoinMENA, a crypto exchange that complies with Islamic law, or shariah.

JPM coin in Bahrain

In collaboration with the Wall Street giant’s blockchain and crypto unit, Onyx, Bahrain’s Bank ABC initiated real-time payments for Aluminium Bahrain (Alba) with its counterparties in the US using the JPM Coin system.

The trial marks an advanced phase for Bahrain central bank’s endeavor to explore blockchain applications in real-world remittances. The bank’s foreign exchange and IT departments are set to work on introducing and commercializing the technology soon.

JPM Coin serves as a payment rail and deposit account ledger, enabling participating entities to transfer US Dollars held on deposit with the

JP Morgan moves more than $6 trillion every day across more than 100 countries for its corporate clients. Additionally, it will be the first real-world application for a cryptocurrency in banking, replacing decades-old networks like Swift.

Rasheed Al Maraj, Governor, at the Central Bank of Bahrain, said: “Through our work with ALBA, Bank ABC and Onyx by J.P. Morgan, we aspire to address and eliminate the inefficiencies and pain points that exist today in the traditional cross-border payments arena.”

Ali Moosa, a senior country officer at JP Morgan Bahrain, described the project as part of a far larger trend toward the tokenization of financial assets, adding: “The completed test with Alba and Bank ABC will help inform further development of JPM Coin Systems for future use by our correspondent banking partners.”

Bitcoin price down

Bitcoin dropped to a three-month low on January 7 amid jitters over U.S. monetary policy tightening and an internet shutdown in Kazakhstan, the world’s second-biggest bitcoin mining hub.

The price of bitcoin fell below the $41,000 mark to $40,749, reaching its lowest level since Sept. 29, according to data from Coin Metrics.

The world’s largest cryptocurrency began falling earlier this week after the minutes from the Federal Reserve’s December meeting hinted the U.S. central bank would dial back its pandemic-era stimulus.

The hawkish comments triggered a sell-off in global stock markets which spilled over into cryptocurrencies.

Another piece of news weighing on crypto prices is the Kazakhstan president’s move to shutter internet service following deadly protests against the government.

The Central Asian country accounts for 18% of the bitcoin network’s processing power, according to the Cambridge Centre for Alternative Finance. Many crypto miners fled China for neighboring Kazakhstan over Beijing’s ban on virtual currency mining.

Kazakhstan’s internet shutdown took as much as 15% of the network offline, according to some estimates.