In a landmark move for the Gulf Cooperation Council (GCC) region, the National Bank of Bahrain (NBB) has introduced its inaugural Bitcoin-linked structured investment fund. Announced on Monday, this innovative financial product is a collaborative effort with digital asset firm ARP Digital, tailored specifically for institutional investors across the GCC, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.
National Bank Of Bahrain Pioneers First Bitcoin Fund
Representing a significant advancement in the financial sector, this fund is the first of its kind introduced by a national bank within the GCC, offering a Bitcoin-focused investment opportunity. Aimed at accredited investors, it provides the dual benefits of Bitcoin exposure coupled with capital protection. As detailed in local media reports, the fund allows investors to reap the benefits of Bitcoin’s performance, albeit capped at a predetermined threshold, while guaranteeing 100% protection of their capital against potential downturns.
Innovative Investment Opportunities
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Hisham AlKurdi, Group Chief Executive of Markets & Client Solutions at NBB, highlighted the groundbreaking nature of this investment offering. “We are proud to introduce this bespoke structured investment, which blends the appeal of digital asset exposure with the security of capital protection. This product underscores our focus on offering our wealth management clients innovative and secure avenues to diversify their portfolios in an evolving investment landscape. It is a testament to NBB’s continued leadership in financial innovation within the region,” AlKurdi stated.
This Bitcoin-linked structured investment is a strategic addition to NBB’s expanding wealth management portfolio, particularly appealing to risk-averse investors eager to explore Bitcoin’s growth potential without exposing their principal capital to extreme volatility.
Strategic Collaboration with ARP Digital
The partnership between NBB and ARP Digital is poised to transform the regional market. Abdulla Kanoo, Co-founder and Co-Chief Executive Officer at ARP Digital, remarked, “Our collaboration 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. This structured investment opens new doors for investors seeking a calculated approach to digital assets.”
Addressing Volatility Concerns
Given Bitcoin’s notorious volatility, the capital-protected structure of this fund presents a unique solution for investors keen to enter the digital asset market without bearing excessive risk. Dalal Buhejji, Executive Director of Business Development for Financial Services at the Bahrain Economic Development Board, celebrated the launch as a major milestone. “The launch of this Bitcoin-linked Structured Investment is a prime example of the true potential of Bahrain’s robust financial services ecosystem, which provides an attractive and streamlined environment that gives rise to innovative solutions. This initiative embodies a seamless fusion of traditional financial practices and inventive blockchain-based solutions, and we are proud to witness local institutions like NBB driving cutting-edge advancements and diversification to the sector,” Buhejji commented.
Bahrain’s Regulatory Landscape
Bahrain continues to demonstrate a proactive approach to fintech innovation, with recent developments in Bitcoin and cryptocurrency regulation underscoring the nation’s commitment to investor protection. In September, Crypto.com received a Payment Service Provider (PSP) license from the Central Bank of Bahrain (CBB), authorizing the platform to offer e-money services and prepaid crypto cards. Earlier, in April 2022, Binance was granted a license to operate in the country.
Bahrain’s regulatory framework is praised for its balanced approach, fostering innovation while ensuring regulatory compliance. Since 2019, the CBB has established comprehensive guidelines for crypto-asset services, mandating transparency and adherence to anti-money laundering (AML) and combating the financing of terrorism (CFT) protocols.
At press time, Bitcoin was trading at $62,500, reflecting ongoing interest and fluctuations in the digital asset market.
