The Central Bank of Bahrain (CBB) has launched a new regulatory framework governing stablecoin issuance and offerings, as outlined in Volume 6 of the CBB Capital Markets Rulebook. This framework marks a key advancement in Bahrain’s digital asset regulation, providing legal clarity and oversight over stablecoin activities including issuance, minting, burning, custody, and reserve management.
Under the new rules, stablecoin issuers must obtain a license from the CBB prior to operations. Only fully fiat-backed stablecoins pegged to the Bahraini Dinar, US Dollar, or other fiat currencies are permitted, with a mandatory 1:1 reserve ratio maintained through high-quality, liquid assets. Issuers are subject to annual audits, strict cybersecurity, governance, and consumer protection standards. The framework also requires a minimum paid-up capital of BHD 250,000, transparency on shareholders, and detailed project disclosures via a stablecoin whitepaper.
Stablecoin holders retain a permanent right of redemption, interest payments are prohibited, and reserve assets must be held in segregated accounts with external audits. The CBB retains the authority to reject issuances harmful to Bahrain’s economy and may impose additional capital buffers to mitigate financial system risks.
This regulatory move underscores Bahrain’s ambition to position itself as a fintech leader by integrating digital assets with traditional finance, enhancing stability and fostering innovation. The framework complements recent developments including Binance’s Payment Service Provider license and the National Bank of Bahrain’s Bitcoin-linked structured investment product, signaling a growing maturity in the region’s crypto ecosystem.