DUBAI, June 14 (Reuters) - Bahrain’s central bank has issued new rules to create a regulatory unit that will allow financial technology firms to test and experiment banking ideas in a controlled environment.
Other global regulators from Hong Kong to Brazil have established similar regulatory incubators to allow fintech firms to experiment with new business models and products without falling foul of financial rules.
Bahrain’s framework provides a virtual space for companies to test their technology-based ideas and is open to existing businesses licensed by the central bank and other local and foreign firms, it said. The testing duration is nine months, with a maximum extension of three months.
Other regulators in the region have been fighting to establish themselves as regional powerhouses in fintech, with Abu Dhabi and Dubai both looking to cultivate a financial startup scene. Saudi Arabia is aiming to place fintech as a focus of its King Abdullah Financial District in Riyadh.
Reporting by Tom Arnold, editing by Louise Heavens