Bahrain’s Central Bank Moves to Regulate Stablecoin Issuance

Bahrain has just taken a major leap into the future of digital finance. According to Crypto News, the Central Bank of Bahrain (CBB) has released the country’s first regulatory framework for stablecoins, marking a huge step toward crypto adoption and financial innovation in the Gulf.

This makes Bahrain one of the few jurisdictions in the Middle East with clear rules for stablecoin activity, bringing much-needed clarity, oversight, and investor protection to the region’s growing digital asset space.

A Bold Step Toward Crypto Regulation

Under the new guidelines, stablecoin activities—such as issuance, minting, burning, and custody, are now recognized as regulated financial services. Any entity planning to operate in this space must apply for a license from the CBB.

Importantly, only fiat-backed stablecoins (pegged 1:1 to currencies like the Bahraini Dinar or U.S. Dollar) will be permitted. These reserves must be liquid, high-quality assets held in segregated accounts and audited annually.

What It Takes to Launch a Stablecoin in Bahrain

The framework sets a high bar for approval. Applicants must meet the following requirements:

• Minimum capital of BHD 250,000 (~$660,000)
  
• Transparent shareholder structure
  
• Strong IT and cybersecurity systems
  
• Risk management and internal controls
  
• A detailed whitepaper outlining project scope and financial details
  

The rules also guarantee the right of redemption to stablecoin holders, ban interest payments, and give the CBB power to reject any project it sees as risky or harmful to the national economy.

Bahrain’s Crypto Vision in Action

This isn’t Bahrain’s first move in the crypto world. In April, Binance’s BPay Global was licensed as a Payment Service Provider by the CBB, allowing fiat on/off-ramps and wallet services directly on Binance in Bahrain.

In October 2024, the National Bank of Bahrain (NBB) launched the region’s first Bitcoin-linked structured investment product. Designed for accredited investors, it provides capital-protected exposure to Bitcoin and was developed with ARP Digital, co-founded by a former Goldman Sachs partner.

These moves show Bahrain’s strong commitment to becoming a regional crypto hub through regulated innovation.

MENA’s Crypto Market Matures

Bahrain’s move reflects a larger shift in the Middle East and North Africa (MENA) region. According to Chainalysis, MENA countries received $338.7 billion in on-chain value from July 2023 to June 2024, about 7.5% of global crypto volume.

A whopping 93% of this activity came from institutional investors, signaling growing trust and maturity in the crypto market.

Final Thoughts

Bahrain’s new stablecoin regulations are more than just a legal update, they’re a signal of intent. With tight controls, licensing rules, and investor protections, the Kingdom is making it clear: it wants to lead the next phase of crypto growth in the Gulf. If others follow Bahrain’s lead, the Middle East could become a key player in global crypto finance.

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