Bahrain Central Bank Launches First Stablecoin Issuance and Offering Rules—Will Crypto Soar?

The Central Bank of Bahrain (CBB) has launched its first regulatory framework for stablecoin issuance and offerings, establishing the Gulf nation as one of the few jurisdictions in the region with a formal rulebook governing the activity.

The new rules issued under Volume 6 of the CBB Capital Markets Rulebook, are designed to provide legal clarity and oversight for stablecoin issuers operating in or from Bahrain.

According to the framework, the offering, issuance, minting, and burning of stablecoins, as well as the custody and reserve asset management associated with them, will now be treated as regulated financial activities.

The Central Bank of Bahrain (CBB) has released its new Stablecoin Issuance and Offering (SIO) Module, the country’s first regulatory framework allowing the compliant issuance of stablecoins. Previously, CBB granted Binance subsidiary BPay Global a license to operate as a payment…

Entities intending to offer such services must obtain a license from the CBB, and no stablecoin activity may occur in or from Bahrain without prior approval.

Also, only fully fiat-backed stablecoins pegged to the Bahraini Dinar, the U.S. Dollar, or other fiat currencies are deemed acceptable by the CBB.

In addition, CBB emphasized that issuers must maintain a 1:1 reserve ratio, backed by high-quality, liquid assets that meet stringent risk criteria.

The framework also noted that issues must fulfill annual audit obligations, and adhere to robust standards on cybersecurity, internal controls, and consumer protection.

Under the new module, the CBB also laid out a multi-layered licensing process in which applicants must demonstrate a minimum paid-up capital of BHD 250,000 and satisfy conditions related to shareholder transparency, governance, risk management, and IT system readiness.

Notably, the new licensing framework introduces clear operational and prudential requirements such as issuers providing a stablecoin whitepaper and outlining key details of the project and its financial underpinnings.

In particular, the regulations enforce a permanent right of redemption for stablecoin holders, prohibit the payment of interest, and require that all reserve assets be subject to external audits and held in segregated accounts.

The CBB emphasized that the body retains the authority to reject any stablecoin issuance it deems contrary to the interests of Bahrain’s national economy or the general public.

The body further warns that it reserves the right to impose additional capital buffers if the issuer’s activities are deemed to pose heightened risk to the financial system.

Bahrain continues to reinforce its position as a regional crypto hub through regulatory clarity and growing institutional involvement.

In April, BPay Global, a subsidiary of Binance, secured a Payment Service Provider license from the Central Bank of Bahrain (CBB).

Binance expands in the Gulf as BPay Global secures regulatory approval from Bahrain’s central bank for fiat payments.#CryptoRegulation #Fintechhttps://t.co/xt7sFsxwAW

The license allows BPay to operate as a regulated entity, offering fiat on- and off-ramps, custodial services, and e-wallet functionality.

This development enables Binance users in Bahrain to make fiat deposits and withdrawals via bank transfers and cards directly on the platform.

“This license represents a positive step in enhancing Bahrain’s digital payments ecosystem, particularly in its support for the crypto-related sector as well as fiat payment solutions,” said Abdulla Haji, Director of the CBB’s Licensing Directorate.

Bahrain’s push toward regulated crypto finance also extends to traditional institutions.

In October 2024, the National Bank of Bahrain (NBB) launched the region’s first Bitcoin-linked structured investment product, offering capital-protected exposure to BTC.

@NBBOnline has introduced Bitcoin investment product, which will be available “exclusively for accredited investors.”#Bitcoin #NBB #InvestmentFundhttps://t.co/NlKyXMPaBj

Developed in collaboration with ARP Digital, co-founded by a former Goldman Sachs partner, the product targets accredited investors seeking controlled exposure to crypto assets.

These developments align with wider adoption trends in the Middle East and North Africa (MENA).

According to Chainalysis, the region received $338.7 billion in on-chain value between July 2023 and June 2024, about 7.5% of global crypto volume.

Notably, 93% of this activity came from institutional and professional transactions above $10,000, reflecting a mature and growing market.

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