IMF commends Bahrain’s progress on digital money

Arabian Post Staff

Bahrain has taken significant regulatory steps to create a favorable environment for fintech, including the introduction of a fintech unit at the Central Bank of Bahrain (CBB), a regulatory sandbox, and new regulations for the digitalization of banking and payment services, IMF noted in a report.

It said quoting the World Bank Global Fintech Database that Bahrain was already a leader compared to the region and upper middle-income countries in 2017, with about 80 percent of the surveyed sample of the population having made use of digital payments.

Since then, digital payment service solutions, such as mobile payment apps, contactless payment cards, and e-wallets, have been introduced and were adopted by the population to a notable extent, particularly since the COVID pandemic.

A large payments solution, called Fawri, for businesses has already overtaken the use of cheques and bank transfers, while a small-denomination instant payment solution, Fawri+, surpassed ATM transactions.

The report noted that almost 90 percent of central banks globally are currently engaged in CBDC-related work; of which more than half have advanced beyond the research stage with the share of countries developing or piloting a CBDC doubling in each of the past two years. Eleven countries have, as of mid-March 2023, introduced a CBDC: the Bahamas, Jamaica, Nigeria, and eight countries of the Eastern Caribbean.

Bahrain is a highly banked economy that serves as a regional financial hub with a banking assets-to-GDP ratio above 600 percent. The banking system is comprised of 75 banks including conventional and Islamic banks as well as retail and wholesale banks.

Also published on Medium.