The Middle East is on the verge of a financial innovation milestone with the upcoming launch of Rain Financial, the region’s first cryptocurrency exchange backed by central bank oversight. After a year in the Central Bank of Bahrain’s fintech sandbox, Rain is poised to become a fully licensed digital asset platform, setting a precedent for regulated crypto adoption across the Gulf.
This development marks a pivotal shift in how oil-rich economies approach decentralized finance. As global interest in blockchain grows, Rain aims to bridge the gap between traditional financial institutions and emerging digital asset markets—offering a secure, compliant gateway for institutional and retail investors alike.
The Rise of Rain Financial
Founded by Saudi blockchain advisor Abdullah Almoaiqel and Egyptian crypto entrepreneur Yehia Badawy, Rain Financial was designed from the ground up to meet rigorous regulatory standards while delivering a user experience comparable to platforms like Coinbase.
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Launched into the Bahrain Economic Development Board’s fintech sandbox in September 2017, Rain spent over a year refining its compliance framework, anti-money laundering (AML) protocols, and know-your-customer (KYC) procedures under direct supervision from the Central Bank of Bahrain. Unlike unregulated peer-to-peer platforms, Rain operates within a structured environment that allows regulators to monitor risk without stifling innovation.
Khalid Saad, CEO of Bahrain Fintech Bay, emphasized the significance:
“There is currently no officially regulated cryptocurrency exchange in the region. We hope Rain will be the first.”
With graduation from the sandbox expected in early 2019, Rain is on track to become a licensed broker-dealer for digital assets—offering fiat-to-crypto trading pairs across Gulf currencies through partnerships with local banks.
Regulatory Challenges in the Gulf
Despite growing global acceptance, the path to legitimacy hasn’t been easy. The broader Gulf Cooperation Council (GCC) has maintained cautious stances toward cryptocurrency.
- In Kuwait, financial authorities have effectively banned institutional involvement in crypto trading.
- Saudi Arabia’s Capital Market Authority declared in August 2018 that no entity or individual was authorized to trade Bitcoin within the kingdom.
Abdullah Almoaiqel noted that much of the hesitation stems from misconceptions about blockchain technology:
“Regulators are primarily concerned about unregistered entities. Many don’t realize Bitcoin transactions aren’t truly anonymous—there are traceable patterns and forensic tools available.”
To address these concerns, Rain has invested heavily in educating regulators, presenting them with real-world examples of transparent, auditable blockchain activity. The team conducted months of workshops mirroring compliance practices used by major Western exchanges, building trust through transparency.
John Collins, partner at Washington-based consultancy FS Vector and former head of policy at Coinbase, highlighted the strategic value of regulatory sandboxes:
“Sandbox programs are designed so that failures are contained. They create a safe space for startups to collaborate with regulators—and build cross-border ‘regulatory bridges’ over time.”
Such collaborations, like those between the U.S. Commodity Futures Trading Commission (CFTC) and the UK’s Financial Conduct Authority (FCA), are paving the way for international alignment on digital asset oversight.
Unlocking Latent Market Demand
While crypto adoption in the Gulf lags behind countries like Turkey and Israel, underlying demand remains strong—particularly among high-net-worth individuals and expatriate communities.
Dallago, Rain’s CEO, observed:
“Gulf investors tend to favor universal stores of value like gold. We believe Bitcoin fits perfectly into this mindset.”
Moreover, remittances represent a massive use case. In several Gulf states—including the UAE and Qatar—over half the population consists of foreign workers sending money home. Traditional remittance channels are often slow and expensive, creating fertile ground for faster, lower-cost blockchain-based alternatives.
Yet measurable trading volume remains modest. For example, LocalBitcoins activity in Saudi Arabia during one week in September 2018 totaled just $266,634—paling in comparison to Argentina’s $6.9 million in the same period. This disparity reflects not lack of interest but rather limited access due to regulatory uncertainty.
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Building Awareness Through Community Engagement
Recognizing that education drives adoption, Rain’s founders have organized dozens of Bitcoin meetups across Kuwait, Saudi Arabia, and Bahrain. One event at Bahrain Fintech Bay drew around 50 attendees—engineers, bankers, students—all eager to learn about decentralized finance.
Almoaiqel explained:
“Our goal is to help people understand the benefits of digital currency. We have a responsibility to counter the negative narratives around scams and fraud.”
These grassroots efforts are slowly shifting perceptions. With support from prominent figures like Mike Komaransky (founder of Cumberland Mining), Jimmy Song (Bitcoin Core developer), and Aaron Lasher (co-founder of BRD wallet), Rain is gaining credibility both regionally and globally.
Core Keywords
- Central bank-backed crypto exchange
- Regulated cryptocurrency platform
- Bahrain fintech sandbox
- Gulf crypto adoption
- Institutional crypto trading
- Fiat-to-crypto gateway
- Blockchain remittances
- Digital asset regulation
Frequently Asked Questions
Q: Is Rain Financial officially licensed?
A: As of 2019, Rain had completed its residency in the Central Bank of Bahrain’s fintech sandbox and was preparing for full licensing. It aims to operate as a regulated broker-dealer for digital assets.
Q: Can I trade fiat currencies for crypto on Rain?
A: Yes. Rain plans to offer direct trading between Gulf currencies (like USD-pegged dirhams and riyals) and major cryptocurrencies through integrated banking partnerships.
Q: Why is Bahrain leading this initiative?
A: Bahrain has established itself as one of the most progressive financial regulators in the Middle East, actively supporting fintech innovation through its sandbox program and clear regulatory frameworks.
Q: How does Rain ensure compliance with AML/KYC rules?
A: Rain implements global best practices in identity verification and transaction monitoring, similar to standards used by Coinbase and other leading exchanges.
Q: Who can use Rain’s services?
A: Initially targeting accredited investors and institutions, Rain intends to expand access to retail users once fully licensed and operational.
Q: What impact could Rain have on the broader Middle East?
A: By demonstrating a successful model of regulated crypto trading, Rain could inspire neighboring countries to develop their own frameworks—accelerating regional adoption.
The Road Ahead
Rain’s journey reflects a broader trend: the convergence of traditional finance and blockchain technology under responsible regulation. As more central banks explore digital currencies and supervised crypto platforms, the Gulf may soon emerge as a hub for compliant innovation.
With strong investor backing, regulatory cooperation, and growing public interest, Rain is not just launching an exchange—it’s laying the foundation for a new era of financial inclusion in the Middle East.
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