A Regional Milestone

The National Bank of Bahrain (NBB) announced a pioneering step in the financial sector recently by launching its first Bitcoin-linked structured investment fund.

Developed in collaboration with digital asset firm ARP Digital, this innovative product is tailored specifically for institutional investors in the Gulf Cooperation Council (GCC) region, which comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.

This fund represents a significant landmark in the region's financial landscape. It is the first time a national bank in the GCC has introduced a Bitcoin-focused investment product.

The fund aims to provide accredited investors with exposure to Bitcoin while ensuring capital protection. Investors can enjoy Bitcoin's performance benefits, capped at a predefined threshold while maintaining 100% capital protection on the downside.

NBB's Innovative Approach

Hisham AlKurdi, Group Chief Executive - Markets & Client Solutions at NBB, highlighted the innovative nature of their offering in a statement. He expressed pride in introducing this bespoke structured investment.

This unique blend of digital asset exposure with security underscores NBB's dedication to offering its wealth management clients secure and diversified portfolio options in an evolving investment landscape.

"This product underscores our focus on offering our wealth management clients innovative and secure avenues to diversify their portfolios in an evolving investment landscape," AlKurdi stated.

Targeting Risk-Averse Investors

The introduction of the Bitcoin-linked structured investment is part of NBB's broader strategy to expand its wealth management product portfolio. This product is targeted at risk-averse investors.

It seeks to provide exposure to Bitcoin's potential growth without subjecting the principal capital to volatility. The collaboration between NBB and ARP Digital is poised to redefine the regional market.

Abdulla Kanoo, Co-founder and chief executive Officer at ARP Digital, noted the potential impact of this collaboration. "Our cooperation with NBB is poised to be a game-changer in the regional market.

By leveraging our expertise in digital assets and NBB's extensive reach in the financial sector, we have created a product that introduces Bitcoin exposure within a highly secure framework."

Bahrain's Regulatory and Financial Landscape

Recent Bitcoin and crypto regulation developments in Bahrain highlight the nation's proactive stance in fostering fintech innovation while ensuring investor protection.

In September, Crypto.com received a Payment Service Provider (PSP) license from the Central Bank of Bahrain (CBB), enabling it to offer e-money services and prepaid crypto cards.

Previously, in April 2022, Binance received a license to operate in the country.

Bahrain's regulatory framework is well-regarded for balancing innovation and regulatory compliance.

Since 2019, the CBB has implemented comprehensive guidelines for crypto-asset services to ensure businesses operate transparently while adhering to anti-money laundering (AML) and combating the financing of terrorism (CFT) protocols.