On Monday, the National Bank of Bahrain (NBB) announced the launch of its first Bitcoin-linked investment fund. The product, developed in partnership with digital assets company ARP Digital, is designed specifically for institutional investors in the Gulf Cooperation Council (GCC) region, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and UAE.
National Bank Of Bahrain Pioneers First Bitcoin Fund
This fund marks a significant milestone in the financial landscape of the region, as it is the first time that a national bank in the GCC has launched an investment product focused on Bitcoin. It aims to provide accredited investors exposure to Bitcoin while ensuring financial protection. Investors will be able to benefit from the performance of Bitcoin, but “bound to a predefined threshold, while enjoying 100 percent capital protection on the downside”, according to a local press release.
In a statement, Hisham AlKurdi, Group Chief Executive – Markets & Client Solutions at NBB, highlighted the new type of investment offering. “We are proud to present this structured investment, which combines the attractiveness of digital asset exposure with the safety of capital protection. This product underscores our focus on providing our wealth management clients with innovative and secure ways to diversify their portfolios in a changing investment environment. It is a testament to NBB’s continued leadership in financial innovation in the region.”
The launch of Bitcoin-linked structured investments is part of NBB’s broader strategy to expand its wealth management product portfolio. This product is aimed mainly at risk-averse investors who want exposure to the potential growth of Bitcoin without putting their principal capital on volatility.
The collaboration between NBB and ARP Digital is set to redefine the regional market. Abdulla Kanoo, Founder and CEO at ARP Digital, commented: “Our partnership with NBB is poised to be a game changer in the regional market. Using our expertise in digital assets and NBB’s extensive reach in the financial sector, we have created a product that presents Bitcoin exposure within a highly secure framework. This planned investment opens new doors for investors looking for an accounting method for digital assets.”
With Bitcoin volatility as the main concern for many investors, the hedged structure of this fund provides a novel solution for clients who want to participate in the digital asset market without taking too much risk. Dalal Buhejji, Executive Director of Business Development for Financial Services at the Bahrain Economic Development Board, hailed the launch as a great success.
“The launch of this Bitcoin-linked investment is a great example of the true power of Bahrain’s strong financial services ecosystem, which provides an attractive and flexible environment that delivers innovative solutions. This program includes a seamless integration of traditional financial processes and blockchain-based solutions, and we are proud to see local institutions like NBB driving high-quality development and diversification in this sector,” said Buhejji.
In Bahrain, recent developments in Bitcoin and crypto legislation highlight the country’s position in promoting fintech innovation while ensuring investor protection. In September this year, Crypto.com received a Payment Service Provider (PSP) license from the Central Bank of Bahrain (CBB). This license enables the platform to offer e-money services and prepaid crypto cards in Bahrain. In April 2022, Binance received a license to operate in the country.
Bahrain’s regulatory framework is also well regarded for its balance between innovation and compliance. Since 2019, the CBB has implemented comprehensive guidelines for crypto-asset services, ensuring that businesses operate in a transparent manner while adhering to anti-money laundering (AML) and countering the financing of terrorism (CFT).
At press time, BTC traded at $62,500.
The featured image was created with DALL.E, a chart from TradingView.com