Palmex has been granted regulatory approval, becoming the first regulated crypto exchange in the whole of the Middle East and North Africa. The Central Bank of Bahrain (CBB) granted Palmex a Regulatory Sandbox License as part of its Fintech sandbox program. Palmex was started by ArabianChain Technology in October 2017 for the Middle East as well as North Africa regions.
The vetting process
Before being given the approval, Palmex went through a very rigorous process of application that involved verification of its policies, security systems as well as processes and controls to protect consumers. Companies in the regulatory sandbox are required to fully adhere to the regulations laid down by the CBB. These include Countering Financing of Terrorism, Anti-Money Laundering and Know Your Customer standards. The companies are also required to follow appropriate protection, disclosure and compensation requirements that are related to their customers.
It is hoped that its use to guide the cryptocurrency sector will set a platform of increased acceptance of digital currencies by banks, regulators and currency exchange houses, which for a long time have been wary of dealing with digital currencies.
What is a regulatory sandbox?
A regulatory sandbox is a process specifically designed to facilitate and guide the launch and development of financial technology to ensure that it is used safely and managed carefully. The sandbox is mainly used to remove any regulatory ambiguity that always comes with new financial technologies. It is effective in ensuring that only legitimate services are launched in the market.
In a statement during the awarding of the license, Mohammed Alsehli, Founder and CEO of ArabianChain said that while launching Palmex, they were well aware that the regulatory status is very important to the future of the company as well as that of the industry as a whole. He added that they have invested a lot of time and resources in complying with the necessary approvals because this will add a level of confidence among the users to further entrust Palmex with more legitimacy.