Bahrain-based Shariah compliant cryptocurrency exchange Rain has first completed the Central Bank of Bahrain’s (CBB) Regulatory Sandbox, the Saudi Gazette reported on Feb. 26.
Rain, which was founded in 2016, has reportedly become the first digital currency exchange to complete the sandbox. The exchange reportedly passed a Shariah compliance certification today, Feb. 26, which was led by a leading Sharia consultancy and audit firm licensed by the central bank of Bahrain, the Shariyah Review Bureau (SRB).
During the qualification process, the SRB examined Rain’s brokerage service and resolved that the exchange’s sale, purchase and custody services comply with Shariah principles. The Sharia certification is currently applicable to three cryptocurrencies — Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC).
Earlier this month the CBB launched a regulatory sandbox to allow blockchain and crypto companies to work in the country, pending formalized regulations. The initiative is set to enable firms "to test their solution on a limited number of users, with a limited number of transactions.” At the time, only 28 companies were approved for the sandbox.
Yesterday, the CBB issued new cryptocurrency regulations, which concern licensing, governance, risk management, Anti-Money Laundering (AML) and Counter-Terrorist Financing measures, management and cybersecurity.
According to the new regulation, crypto exchanges will need to have enhanced due diligence when onboarding new clients, as well as specifications ensuring that safe encrypted custody wallets will always be retrievable.
In July 2018, Stellar reportedly became the first distributed ledger protocol to obtain Shariah compliance certification in the money transfer and asset tokenization field.