Bahrain-based digital currency exchange Rain is looking to bring a regulated, secure exchange to the Middle East.
Despite having a well developed financial system, the Middle East currently lacks a safe and secure way to buy and sell digital currencies. The region’s combination of high fees and pricing, poor user experience, and a lack of clear regulatory standing have made it difficult for consumers and institutions to trade digital currencies.
Two of Rain’s co-founders, AJ Nelson and Joseph Dallago, attended the University of Iowa, where they created clusterFlunk, an online platform that offered college students a place to meet, discuss college courses and share notes. The company raised a total of $1.1M in funding over two rounds before closing down in 2015.
After graduating from the University of Iowa, Nelson and Dallago became interested in the digital currency space, and in 2016, decided to enter the space full time. Over the last two years, they have spoken with regulators, banks and Meetup communities throughout the Middle East to learn as much as possible about the new technology and its presence in the region.
“We wanted to understand two different things. We wanted to understand what digital currency is fundamentally useful for and secondly, we wanted to understand who was making money in the space,” said Dallago. “It was really important for us to create a sustainable business so we wanted to understand, in this very new industry, who are actually making money.”
“After having done a lot of research, it was very obvious to us that the U.S., Europe and China all had pretty good, well-established exchanges at this point,” Nelson said. “We decided that those regions were pretty well taken care of and we wanted to look elsewhere for a region that really needed bitcoin and a digital currency and did not have an exchange.”
They decided that the Middle East was in a strong need of a licensed and regulated exchange and decided to set up an exchange in Bahrain. Last year, they became the first digital currency exchange to enter Bahrain’s regulatory sandbox.
“Since being admitted, we’ve been operating, serving customers, and getting up to speed to all of their regulatory requirements over the last year,” Nelson said. “We’re currently in the process of exiting the sandbox. When we exit, we’ll be the first licensed exchange in the Middle East. We’re really excited to bring a region that doesn’t to have a licensed exchange a regulated and safe way to buy and sell crypto.”
In addition to exiting the regulatory sandbox, Rain has plans to launch an Android app and credit card support soon, with the goal of launching an order book exchange sometime next year as well.
“We think there’s a huge untapped potential in the Middle East market for digital currency. We believe that over the next five years we’ll be able to be a top 15-20 exchange in the world,” Nelson said. “That’s our ambition, to be a world player in the realm of digital currency exchanges.”