The National Bank of Bahrain (NBB) has launched the first bitcoin-linked structured investment product in the Gulf Cooperation Council (GCC), a landmark in the region’s financial industry. This is designed for accredited investors to get exposure to Bitcoin strategically and safely, thus positioning Bahrain’s increasing role in fintech and investment in digital assets.
NBB partnered with ARP Digital, a digital asset specialist firm, to develop the new investment vehicle. Bahrain launched the product during the Fintech Forward 2024 conference, highlighting the country’s focus on fintech.
ARP Digital's involvement also adds value, as it can provide a wealth of knowledge in digital assets, which is relevant to NBB’s goals to provide diversified, risk-adjusted investments.
ARP Digital's involvement in NBB's investment product offers valuable knowledge in digital assets, aligning with the company's goal of providing diversified, risk-adjusted investments. The product allows investors to access Bitcoin's performance up to a certain level without offering 100% consideration on a downside component of capital.
This structure aims to maintain the prospect of gaining on Bitcoin while hedging against its volatility, making it attractive to investors who don't want to risk significant money in the crypto market.
Abdulla Kanoo, co-chief executive officer at ARP Digital, noted that the partnership between ARP Digital and NBB offers a secure entry point for investors interested in digital assets. He highlighted the importance of creating a safe and structured product in a region where digital asset investments are still emerging but gaining interest rapidly.
The product’s introduction follows a broader strategy by the Bahraini government and financial institutions to attract fintech companies and develop a robust regulatory environment for digital assets.
NBB's Group Chief Executive for Markets & Client Solutions, Hisham AlKurdi, emphasizes the importance of digital capabilities and ESG offerings in wealth management. He believes NBB is committed to providing unique financial services, allowing investors to experience an unregulated digital currency market.
Bahrain's initiatives to balance digital asset growth are gaining momentum, with Binance and Crypto.com launching operations in 2023 after acquiring a license from the central bank. These actions reflect the region's intention to establish market reforms and boost business and commerce growth.
The introduction of this structured bitcoin product comes at a time when interest in digital assets is growing across the GCC region. According to a report by Chainalysis, the Middle East and North Africa (MENA) region accounted for 7.5% of global bitcoin and cryptocurrency transaction volume between July 2023 and June 2024, with institutional and professional investors driving much of the activity.
Besides the achievements of Bahrain, other countries of the region, such as the UAE, have also worked on forming legislation for digital assets. Dubai’s Virtual Asset Regulatory Authority (VARA) released extensive regulations to govern Web 3 companies adding to the Middle East’s burgeoning digital asset landscape.