The National Bank of Bahrain (NBB) has unveiled the GCC’s first Bitcoin-linked Structured Investment, in partnership with ARP Digital. The announcement was made during a special ceremony at Fintech Forward 2024, marking a significant milestone for Bahrain’s financial sector and the wider region.
This innovative investment product is tailored exclusively for accredited investors, allowing them to gain exposure to Bitcoin’s (BTC) long-term growth while ensuring capital preservation. It offers investors the potential benefits of Bitcoin’s upward performance, capped at a predefined threshold. This mechanism serves as a robust hedge against the volatility commonly associated with digital currencies.
Hisham AlKurdi, Group Chief Executive – Markets & Client Solutions at NBB, stated, “We are proud to introduce this bespoke structured investment, which blends the appeal of digital asset exposure with the security of capital protection. This product underscores our focus on offering our wealth management clients innovative and secure avenues to diversify their portfolios in an evolving investment landscape. It is a testament to NBB’s continued leadership in financial innovation within the region.”
Regarding the capital preservation aspect of this investment, Abdulla Kanoo, Co-Founder and Co-Chief Executive Officer at ARP Digital, explained in an email to Unlock Blockchain, “The product is 100% capital guaranteed, meaning that if an investor subscribes and BTC loses 50% of its value, they still retain 100% of their initial investment. ARP Digital has a core competency in structured investments and is therefore able to create products that allow for capital protection,” Kanoo added.
The launch of the Bitcoin-linked Structured Investment aligns with the Bank’s strategy to enhance its product offerings for wealth management clients by providing tailored solutions that balance growth potential with risk mitigation. This initiative caters to risk-averse investors seeking exposure to Bitcoin while fully insulating their principal investment from market fluctuations.
Kanoo further emphasized the product’s compliance, stating, “The product is only available to accredited investors and is fully compliant with local regulations.” He added that this investment product is expected to influence the broader adoption of cryptocurrencies among traditional investors in Bahrain and the GCC. “It opens the door for an entire new wave of non-retail clients in the GCC region. The client base that would allocate to such a product would likely drive broader adoption of Bitcoin amongst traditional investors,” Kanoo told Unlock Blockchain.
Dalal Buhejji, Executive Director of Business Development for Financial Services at Bahrain Economic Development Board, remarked, “The launch of this Bitcoin-linked Structured Investment is a prime example of the true potential of Bahrain’s robust financial services ecosystem, which provides an attractive and streamlined environment that gives rise to innovative solutions, which is key to maintaining Bahrain’s position as a leading regional fintech hub and trusted investment destination for local and global investors alike. This initiative embodies a seamless fusion of traditional financial practices and inventive blockchain-based solutions, and we are proud to witness local institutions like NBB driving cutting edge advancements and diversification to the sector.”
The Bitcoin-linked Structured Investment solidifies NBB’s position as a pioneer in digital asset investment and highlights the Bank’s forward-thinking approach to aligning traditional wealth management practices with emerging trends in global finance. NBB continues to play a crucial role in advancing Bahrain’s status as a hub for financial innovation and investment diversification in the region.
