Middle East's First Central Bank-Backed Crypto Exchange to Launch in 2019

Two blockchain veterans are gearing up to launch what could be the first cryptocurrency exchange in the Persian Gulf to be licensed by a central bank.

Revealed exclusively to CoinDesk, Rain Financial has opened its public waiting list after a year in the Central Bank of Bahrain's fintech sandbox.

Co-founded by Saudi blockchain consultant Abdullah Almoaiqel and Egyptian investor-turned-meetup organizer Yehia Badawy, along with their business partners Joseph Dallago and AJ Nelson, Rain aims to offer both a brokerage for retail crypto investors and an institutional platform along the lines of Coinbase Pro in Silicon Valley.

Although at least five other exchanges are also involved with the Bahrain sandbox - a regulatory program where applicants experiment in a closely supervised environment before graduating to full-fledged licensed businesses - Rain was the first to join in September 2017, and expects to launch in early 2019.

"There's no cryptocurrency exchange in the region that is officially regulated. Hopefully, Rain will be the first one."

Further, Rain has tapped Joseph Dallago, an alumnus of the crypto wallet startup Abra, to be its CEO. Uphill battle.

While BitOasis has focused on building an active user base among retail investors, the Rain founders have been meeting with institutional players throughout the region, from bankers to regulators, seeking their support.

"The primary concerns with the regulators in Saudi Arabia is with unregistered entities," Rain co-founder Almoaiqel told CoinDesk.

After months of educating regulators about the know-your-customer and anti-money-laundering standards applied by Western exchanges, which it plans to follow, Rain says it has secured banking partners to allow fiat-on ramps in all the local Gulf currencies.

Across the Gulf, crypto adoption has been slow to take root compared to Middle Eastern countries like Turkey and Israel.