Bahrain and Malaysia to cooperate on crypto sandbox

Bahrain and Malaysia to cooperate on crypto sandbox

In a recent official visit by Malaysia’s Prime Minister Datuk Seri Anwar to Bahrain where he met with Bahrain’s Minister of Finance and Economy Shaikh Salman Bin Khalifa Al Khalifa to Malaysia, discussions on cooperating when it comes to cryptocurrencies and fintech were revealed.

As per Malaysia’s Prime Minister Datuk Seri Anwar both Malaysia and Bahrain are committed to strengthening their economies including areas related to cryptocurrencies and a potential sandbox platform.

“In addition, we also discussed cooperation in tourism, the connectivity between Kuala Lumpur and Manama, as well as in the manufacturing sector,” he said in a statement today.

Anwar said that Bahrain had also expressed its commitment to the success of the Asean-Gulf Cooperation Council (GCC) Summit and the Asean-GCC+China Summit, which will be attended by Crown Prince and Prime Minister Sheikh Salman Hamad al-Khalifa.

Malaysia discussed crypto regulatory frameworks with Binance and UAE as well

Earlier in January 2025, Malaysia’s Prime Minister Datuk Seri Anwar Ibrahim met with Binance founder Changpeng Zhao and UAE officials to discuss potential crypto regulatory frameworks. The discussions, which took place during Anwar’s three-day official visit to Abu Dhabi, centered on establishing policies that could recognize the crypto industry and modernize Malaysia’s financial system.

As noted at the time, Ibrahim stated, “I had lengthy discussions with the Abu Dhabi leadership and Changpeng Zhao, co-founder of the world’s largest cryptocurrency platform, Binance,” Anwar said, adding that he has urged the central bank and Treasury to study digital finance to avoid being left behind and protect the public interest.”

UAE policymakers expressed willingness to collaborate with Malaysia in developing its crypto regulatory approach.

Bahrain one of leading crypto regulated MENA countries

Bahrain was one of the first countries in the Middle East and Gulf to regulate cryptocurrencies through its Central Bank. It also launched a crypto sandbox and has since licensed several crypto exchanges including Binance, Crypto.com, CoinMENA, RAIN, BitOasis and others.

It is currently working on its stablecoin regulations as well as researching CBDC implementations.

Crypto Regulations in Malaysia need further development

Malaysia considers crypto as securities and are traded as such in the country, however The Central Bank of Malaysia Act establishes the ringgit as the country’s sole legal tender, effectively excluding cryptocurrencies from this status. Oversight of cryptocurrencies is shared between Bank Negara Malaysia and the Securities Commission. The central bank handles general crypto matters, while the securities regulator regulates digital currencies classified as securities.

Yet their crypto regulations still lack transparency and consistency.

There have been calls from within the government to adopt a more progressive stance towards cryptocurrencies. In March 2022, Zahidi Zainul Abidin, the deputy minister of the Communications and Multimedia Ministry, suggested that Malaysia should adopt bitcoin and other cryptocurrencies as legal tender. “We hope the government can allow this,” Zahidi said in Parliament, according to Bloomberg.

Additionally, religious authorities in Malaysia, such as the Shariah Advisory Council of the Securities Commission, have recognized digital currencies as a form of property from an Islamic perspective, further legitimizing their use within the country’s predominantly Muslim society, according to a study published in the Journal of Fatwa and Falak Selangor.

Still Malaysia faces one major issue with crypto and that is illegal crypto mining. stimates from the Deputy Energy Minister put the cost of this illegal activity at roughly $723 million in stolen electricity between 2018 and 2023.

Bahrain Minister of Finance says Bahrain is in the midst of issuing stablecoin regulations

Bahrain Minister of Finance says Bahrain is in the midst of issuing stablecoin regulations

Finance and National Economy Minister Shaikh Salman bin Khalifa Al Khalifa noted the Central Bank of Bahrain (CBB) is in the midst of finalizing regulations to govern the issuance of stablecoins.

“These assets are expected to accelerate financial transactions, reduce costs, and expand accessibility, particularly for international transactions, thereby enhancing and supporting trade,” he said responding to a question by MP Hesham Al Ashiri on cryptocurrencies.

“The CBB is currently assessing the feasibility and effectiveness of using crypto assets in payments to improve the efficiency of existing systems,” he added.

“Before issuing any new laws or regulations, the bank ensures the release of consultation papers to gather feedback from stakeholders in the sector to ensure that the proposed regulatory requirements can be effectively implemented without hindering growth and innovation,” the minister stressed.

“The bank actively monitors the cryptocurrency market in Bahrain to mitigate potential risks, ensure economic stability, and provide the highest levels of protection for investors. To achieve this, licensed service providers are required to comply with various regulatory requirements, implement effective policies and systems for service delivery, and submit periodic reports, including details of executed transactions,” he said.

The minister also highlighted that having a crypto regulatory framework has strengthened Bahrain’s position as a leading regional hub for the digital economy and cryptocurrency sector.

The Central Bank of Bahrain had announced back in December 2024 that they were studying how the banking sector could offer stablecoins.

Eight crypto entities receive in-principle approval from VARA Dubai

Eight crypto entities receive in-principle approval from VARA Dubai

Eight crypto entities have received in-principle approval from Dubai’s Virtual Asset Regulatory Authority (VARA) listed on VARA website. Those receiving in principle approval include names such as BitPanda, Hashkey and Bybit which are both seeking a crypto brokerage license, as well as Bitgo which is seeking a crypto custodian license.

Other names include Atremo Digital, Gate Technologies, and MKX Virtual Assets Broker, which have all as well received in principle approval for a crypto broker licenses.

LCT Global, also known as CoinW has also received an in-principle approval for crypto exchange license. In December 2024, “Securing VARA’s In-Principle Approval is a defining moment for LCT,” said Sonia Shaw, CEO of LCT. “It affirms our steadfast commitment to compliance, transparency, and innovation. This achievement positions us to deliver secure, world-class crypto solutions and establish trust with our clients and stakeholders worldwide.”

Once or if these crypto services providers receive their final licenses, they will be added to the already existing licensed 23 virtual asset service providers in VARA.

The UAE had become an attractive destination for leading crypto exchanges including Binance, Crypto.com, OKX and others. It is not only attractive for its regulatory frameworks in place which includes the recent stablecoin regulations from UAE Central Bank, but also for the ownership of crypto in the country.

According to data from Triple A, countries within the “Emerging Economies” category dominate in crypto ownership. The UAE leads the way at 25.3%, the highest percentage of ownership. Singapore follows closely at 24.4%, while Turkey is at 19.3%. Both exhibit higher adoption rates compared to Advanced Economies like Switzerland (12.4%) and the United States (15.0%).

Mohammed Al Hakim, Crypto.com President, UAE Operations noted in a a session on The Future of Crypto at the 8th annual Sharjah Entrepreneurship Festival (SEF) that, “In the next two years, people in the UAE should be able to use cryptocurrency for everyday transactions”.

Globally 562 million people own crypto. This number is set to rise as the United States takes on a more open regulatory stance to crypto, stablecoins, and service providers.

The UAE still remains at the forefront, with the UAE Securities and Commodities Authority has recently released a draft regulation under the title “ Security Tokens and Commodity Tokens Contracts”. The UAE SCA  in its draft regulations has defined Security tokens as digital assets created using Distributed Ledger Technology to represent financial rights or tangible assets. Examples of Security tokens include equity tokens, and bond tokens. With regards to Commodity Tokens, the regulator has defined them as a type of digital assets that are based on the value of physical commodities such as gold, oil, metals, or agricultural products.

WadzPay Blockchain crypto entity no longer licensed in UAE

WadzPay Blockchain crypto entity no longer licensed in UAE

WadzPay, a blockchain technology and financial services company that had applied and had received a VASP license pending further operational requirements in Dubai UAE, via the Dubai Virtual Assets Regulatory Authority, has been delisted from VARA’s public registry, which implies that WadzPay is no longer a regulated entity in Dubai UAE. Reasons behind this are not unclear given the efforts WadzPay had made over the years to received this license, yet on VARA website it shows that the license has been withdrawn.

This comes months after WadzPay in November of 2023, had announced it secured a capital commitment of $50 million SGD in the form of a Share Subscription facility from GEM Global Yield (GEM). The SSF as noted in that press release, was supposed to accelerate the company’s growth strategy via acquisitions, partnerships and organic initiatives.

The agreement established a Share Subscription Facility granting WadzPay the option to call upon GEM to subscribe for Ordinary Shares up to a total value of SGD 50 million (approximately USD 36.7 million) upon a successful public listing for a thirty-six-month period.

WadzPay had received a VASP license for crypto brokerage under pending status back in February 2024. Yet until now it was still pending. In November Anish Jain, Founder and CEO, noted that the company opened its Dubai offices back in 2022, citing that a main attraction of Dubai was its supportive regulatory environment.

WadzPay “bridges the gap between fiat currencies and virtual assets,” according to Anish Jain, founder and CEO.

Moreover Jain had described the license, – issuance of which is subject to meeting pre-operating requirements and qualifications – as a “pivotal advancement for WadzPay… enhancing trust and credibility among stakeholders viewing Dubai as a launchpad for global ambition.”

It would seem that this ambition has faded for WadzPay.

Moroccan crypto regulation aligns with G20 recommendations

Moroccan crypto regulation aligns with G20 recommendations

Once again the Governor of Bank Al-Maghrib (BAM), Abdellatif Jouahri, has spoken about the crypto assets regulatory framework that the country will soon adopt noting that it will align with G20 recommendations. In a press conference this week, during the BAM’s council for 2024, he noted that the crypto framework will manage the use of crypto assets while encouraging innovation in the financial sector.

Last month the Governor also noted that the crypto framework was in the adoption phase. Morocco has been working on this crypto framework since 2022.

Jouahri said that the regulation aligns with the latest G20 recommendations. It also addresses the financial risks linked to crypto-assets.  

“We want to regulate the use of crypto-assets without hindering the innovation that may arise from this ecosystem,” Jouahri said.  

The governor explained that the framework was developed with technical assistance from the International Monetary Fund (IMF) and the World Bank. It seeks to balance two priorities; ensuring a secure and well-regulated environment and fostering innovation.  

The drafting process included broad consultations with national and international institutions, as well as economic stakeholders. “We engaged all relevant parties to create this framework. This approach ensures effective adoption and minimizes uncertainties,” Jouahri added.  

In September 2024, Chainalysis in its 2024 Geography of Cryptocurrency report covering the MENA region noted that MENA is the seventh largest crypto market globally in 2024 with the biggest two crypto countries being Turkey and Morocco. Turkey held 11th position while Morocco 27th where Turkey capture $137 billion and Morocco $12.7 billion.

Moroccan Central Bank says crypto regulations in adoption phase

Moroccan Central Bank says crypto regulations in adoption phase

The Moroccan Central Bank’s governor Abdellatif Jouahri announced on November 26th that the digital asset/crypto regulation law has been prepared and is in the adoption phase.


The Moroccan Central Bank also known as Bank Al Maghrib worked on its crypto and digital asset’s regulation alongside the World Bank and IMF (International Monetary Fund).


Despite the lack of crypto regulations in Morocco, it is one of the fastest growing crypto markets both globally and in the MENA region. As Per Chainalysis’ Geography of Cryptocurrency report for the Middle East and North Africa (MENA) region in 2024, Morocco ranked 20th worldwide for crypto adoption. In addition, Morocco received the highest crypto transaction value of MENA’s African bloc comparing it to Algeria, Egypt, Libya, Morocco and Tunisia.


The report for 2024 noted, “MENA includes two countries ranked in the top 30 of the global crypto adoption indexes: Türkiye (11th) and Morocco (27th), capturing $137 billion and $12.7 billion of value received, respectively.”
The announcement was made during the High-Level Regional Symposium on Financial Stability.


Jouahri noted, “Bank Al-Maghrib has prepared, with the participation of all stakeholders and with the support of the World Bank, a draft law governing crypto assets which is currently in the adoption process.”


He also mentioned that work in CBDCs ( Central Bank Digital Currencies) and the work the Moroccan government is doing in this domain especially as CBDCs can increase financial inclusion.


He added, “We launched the MDBC project more than three years ago with the aim of anticipating and guiding the strategic choices and decisions of Bank Al-Maghrib in this area. The project also aims to strengthen our capacities and expertise on this complex and multidimensional subject.


The Central Bank of Morocco considers this a long-term undertaking, and has impact on the monetary policy and financial stability.
Earlier this year, Morocco announced its Moroccan digital 2030 strategy to continue $10.35 billion to GDP. As per the strategy, the country seeks to create 240,000 jobs in the digital sector by 2030, which it expects will contribute 100 billion dirhams ($10.36 billion dollars) to the country’s gross domestic product while increasing digital export revenues to 40 billion dirhams ($4.15 billion).
The Moroccan Agency for Digital Development (ADD) will play a central role in supporting the digitalization of public administrations according to the head of the government, while a unified digital portal will standardize administrative procedures across various stages.

Dubai Virtual asset regulator, VARA fines seven UAE VASPs

Dubai Virtual asset regulator, VARA fines seven UAE VASPs

The Virtual Assets Regulatory Authority (VARA) as part of its enforcement program has fined as well as issued cease and desist orders 7 VASP entities for operating without a license and for breaching marketing regulations. The fines reach up to $27,000 depending on severity of violation.

VARA has asked the public to avoid engaging with unlicensed VASP firms because this exposes them to significant financial and reputational risk.

The VARA message, clearly stated, “Only firms licensed by VARA are authorized to provide virtual asset services in/from Dubai, and the Authority remains steadfast in its commitment to protect consumers and investors, and to preserve market integrity. ”

The Regulatory Affairs and Enforcement at VARA also noted, “Our priority is to ensure that Dubai’s virtual assets ecosystem remains secure for consumers and investors while being a progressive environment for compliant entities. Market enforcement actions send a reinforcing message: VARA will not tolerate any attempts to operate without appropriate licenses, nor will we allow unauthorized marketing of virtual asset activities. Our marketing regulations further emphasize Dubai’s commitment to ensuring transparency and always protecting stakeholder interests.” 

The 7 un-named VASP has been asked to cease their activities and stop marketing or advertising their virtual asset services.


Fines issued in this round range from AED 50,000 ($13,000) to AED 100,000 ($27,000) per entity, depending on the nature and severity of the specific instance of such violation.

Few weeks prior the regulator published its marketing regulations which covers not only Dubai but the entire UAE and GCC region.

Dubai’s DIFC Regulatory authority now allows crypto asset investment and stablecoins

Dubai’s DIFC Regulatory authority now allows crypto asset investment and stablecoins

The Dubai Financial Services Authority (DFSA) the regulatory arm of DIFC ( Dubai International Financial Center) has amended its crypto token regime. These changes stem from the proposals outlined in Consultation Paper 153 – Updates to the Crypto Token regime published in January 2024.

According to the press release, this marks a significant step in refining and advancing the regulatory environment for Crypto Tokens in the Dubai International Financial Centre (DIFC).

Amendments are related to the following areas, funds, custody, recognition of crypto tokens and financial crime

In terms of funds DFSRA now allows the offering of units of external and foreign funds investing in recognized crypto tokens, as well as the ability for domestic qualified investor funds to invest in unrecognized crypto tokens. Minimum individual investment in fund is $50,000. The Fund’s investment in Crypto Tokens is limited to Recognized Crypto Tokens and does not exceed 20% of the gross asset value of the Fund.

Firms can offer custodial and staking services as per the amendment but they cannot offer lending services. Cited in the document, ” An Authorized Firm must not offer or provide any facility or service that allows a Client to lend a Crypto Token to the Authorized Firm or to another person unless it is reasonably satisfied that:. (2) The restriction in (1) does not apply to: (a) an Authorized Firm that is authorized to Provide Custody, if: (i) the Crypto Token is not a Prohibited Token; (ii) the Authorized Firm is reasonably satisfied that: (a)(A) the Client is a Professional Client or Market Counterparty; and (b)(B) the lending is solely for the purpose of staking.; and (iii) the requirements in (3) have been met”

An Authorized Firm must be able to demonstrate to the DFSA’s satisfaction the grounds upon which the Authorized Firm considers the Third Party Agent or a non DIFC custodian to be suitable to hold Safe Custody Investments or Safe Custody Crypto Tokens.

In addition DFSA has replaced its previous Anti-Money Laundering, Counter-Terrorist Financing and Sanctions Module (AML) – (AML/VER25/05-24) is repealed and has been replaced by Appendix 1 to this instrument and may be identified by the following reference – (AML/VER26/06-24). VASPs will have to comply with Federal Cabinet Resolution No. 10 of 2019 requirements under Federal AML legislation to Virtual Asset Service Providers (VASPs), in addition to Financial Institutions and DNFBPs. The DFSA’s AML regime applies in addition to the Federal AML legislation.

In terms of NFTs and utility tokens, the DFSA has excluded a Non-Fungible Token (NFT) and a Utility Token from its Crypto Token definition where such a Token meets specified criteria. However The DFSA has prescribed in AML Rule 3.2.1 that a person who carries on the business or profession of issuing or providing services related to a NFT or Utility Token is a DNFBP. An exclusion applies, in the case of an issuer, if the value of each NFT or Utility Token issued is less than $15,000 and, in the case of a service provider, if the service is IT support or advice to an issuer.

VASPs will have to adhere to AML requirements of the government of the U.A.E. or any government departments in the U.A.E.; the Central Bank of the U.A.E.; the FIU; the National Anti-Money Laundering and Combating Financing of Terrorism And Financing of Illegal Organizations Committee (NAMLCFTC); FATF; U.A.E. enforcement agencies; and the DFSA.

DFSA also recognized stablecoins which it called Fiat crypto tokens. DFSA does not consider privacy tokens or algorithmic tokens as recognized.

As noted, ” if Fiat Crypto Token, all of the requirements are met in respect of that Fiat Crypto Token including the matters referred to the regulatory status of the Crypto Token in other jurisdictions, including whether it has been assessed or approved for use by a Regulator in another Recognized Jurisdiction; whether there is adequate transparency relating to the Crypto Token, including sufficient detail about its purpose, protocols, consensus mechanism, governance arrangements, founders, key persons, miners and significant holders; the size, liquidity and volatility of the market for the Crypto Token globally; the adequacy and suitability of the technology used in connection with the Crypto Token and whether risks associated with the Crypto Token are adequately mitigated, including risks relating to governance, legal and regulatory issues, cybersecurity, money laundering, market abuse and other financial crime.

These changes are based on recent market developments, recommendations from international standard-setters and the DFSA’s supervisory experience.

Over the past two years, the DFSA has engaged with over 100 firms looking to be licensed, gaining valuable insights into the market dynamics and regulatory needs.

Ian Johnston, Chief Executive of the DFSA, said: “Our objective with the Crypto Token regime is to foster innovation in a responsible and transparent manner while ensuring we meet our regulatory objectives. At the DFSA, we have taken a balanced approach in the development of this regime and remain committed to evolving it in line with global best practices and standards.”

Noteworthy is that the amendments did not cover insurance which was mentioned in January in the consultation paper.

UAE regulated Hextrust crypto custodian granted new license for crypto brokerage from VARA

UAE regulated Hextrust crypto custodian granted new license for crypto brokerage from VARA

HexTrust, a digital asset custodian, under the UAE entity name of HT Market MENA, has been granted a VASP license from Dubai’s Virtual Asset Regulatory Authority (VARA) that will allow it to offer crypto brokerage services allowing it to serve both institutional and retail clients, pending that all requirements are fulfilled.

This is the second VASP license that HexTrust receives from VARA. It was previously awarded a crypto custodial license back in November 2023.

Hex Trust’s Dubai office was established in June 2022, and is led by Regional MENA Director, Filippo Buzzi.

On receiving the first license for digital asset custody services Buzzi stated, “It is exciting for us to become one of the first virtual asset companies to receive this operating license in Dubai,” said Filippo Buzzi, Hex Trust’s Regional Director MENA. “Hex Trust is fully committed to expanding into the Middle East and sees enormous potential for digital asset growth given the progressive regulations, welcoming governments, and thriving crypto ecosystem in the region.”

With this license Hex Trust will not only be able to hold crypto for its clients but also allow trading.

To date Dubai’s VARA has awarded 18 VASP licenses with the latest being Binance and WadzPay.

Moreover, there are more licenses on the way with Liminal Custody Solutions Dubai entity, “First Answer Custody FZE”, both providers of digital asset custody and wallet solutions, securing an initial approval from Dubai’s virtual asset regulatory authority (VARA).

Prior to that NorthStake a firm which offers safe, compliant and secure investment in Digital Assets for institutional investors as well as crypto staking and trading services applied and received a preliminary approval for a license from Dubai’s virtual asset regulatory authority (VARA) for a license.