Central Bank of Bahrain Issues New Guidelines for Crypto-Asset Transfers and Wire Transactions

The Central Bank of Bahrain has introduced new guidelines to enhance financial crime prevention by regulating crypto-asset transfers and wire transactions. The guidelines aim to ensure compliance with anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations.

Guidelines for Financial Institutions

• When originating a crypto-asset transfer, financial institutions are not required to provide originator information to individual users who are not financial institutions.
• However, financial institutions receiving a crypto-asset transfer from an entity that is not a financial institution must obtain the required originator information from their customer.

Importance of Originator Information

• The guidelines emphasize the importance of including originator information in domestic wire transfers, unless this information can be made available by other means.
• In such cases, the ordering financial institution need only provide the account number or a unique transaction reference number.

Responsibilities of Financial Institutions

• Financial institutions are expected to maintain all originator and beneficiary information collected.
• They must not execute crypto-asset transfers or wire transactions if they do not comply with the requirements.

Intermediary Financial Institutions

• Intermediary financial institutions processing crypto-asset transfers or cross-border wire transfers must ensure that all originator and beneficiary information accompanying a transfer is retained.
• They must take reasonable measures to identify transfers lacking required originator or beneficiary information, and have effective risk-based policies and procedures for determining when to execute, reject, or suspend transactions.

Beneficiary Financial Institutions

• Beneficiary financial institutions are responsible for verifying the identity of beneficiaries and maintaining this information in accordance with AML/ CFT regulations.
• They must take reasonable measures to identify crypto-asset transfers and wire transfers lacking required originator or beneficiary information, and have effective risk-based policies and procedures for determining when to execute, reject, or suspend transactions.

Key Takeaways

• Financial institutions receiving a crypto-asset transfer from an entity that is not a financial institution must obtain originator information from their customer.
• Originator information must be included in domestic wire transfers unless available by other means.
• Intermediary financial institutions must retain all originator and beneficiary information accompanying a transfer.
• Beneficiary financial institutions must verify the identity of beneficiaries and maintain this information in accordance with AML/ CFT regulations.

Contact

For more information, please contact the Central Bank of Bahrain at [insert contact details].