Bahrain is set to join other Persian Gulf region countries in a unified payments/settlement system.
The country’s Shura Council approved the move this weekend, according to a Monday (May 1) report by Gulf Daily News.
In doing so, the council set the stage for Bahrain to link its payment and settlement systems with those of the other countries in the Gulf Cooperation Council (GCC): Saudi Arabia, Oman, Qatar, Kuwait and the United Arab Emirates.
“The electronic platform will have all official exchange rates daily and will enable account-to-account transfers, purchases and import to export, amongst others, without the need for SWIFT or corresponding banking protocols,” said Central Bank of Bahrain banking operations Executive Director Hesa AlSada.
PYMNTS wrote about the GCC efforts last year, noting that the countries — in the years ahead — plan to further integrate their monetary systems by aligning the respective payment rails under the banner of the Gulf Payment Company (GPC).
This is a program that will connect all payment systems in the GCC countries through an independent company owned and funded by the Gulf countries’ central banks.
AlSada told the council that while five GCC countries had signed up for the unified system, only Saudi Arabia had finalized its membership.
Research published in the PYMNTS/Clearing House collaboration “The Real-Time Payments World Map” has shown that Bahrain is fast emerging in the real-time payments space, with the country’s real-time payments volume projected to top 1 billion by 2026.
“A few noteworthy indicators have marked Bahrain’s real-time payments innovations,” PYMNTS wrote in February.
“In November, global remittance giant MoneyGram announced a partnership with Bahrain’s Beyon Money. This collaboration allows Beyon users to send money to more than 200 countries and is expected to go live in the following months.”
The country also launched the Fawri+ instant payments platform in 2015, seeing significant adoption of the service in recent years. It’s grown from representing under 1% of regional electronic transactions in 2017 to more than half of those transactions by 2021.
In her comments to the council, AlSada also mentioned that Bahrain was on track to test a digital currency. The UAE announced earlier this year that it, too, was preparing for the central bank digital currency (CBDC).
In its announcement in February, the country’s central bank said its digital dirham will “address the problems and inefficiency of cross-border payments and help drive innovation for domestic payments respectively.”