Bahrain has rolled out a comprehensive law to govern Bitcoin and stablecoins, introducing the Stablecoin Issuance & Offering (SIO) Module under Rulebook Volume 6 of the Central Bank of Bahrain (CBB). The framework, officially launched on 4 July 2025 and effective immediately, sets detailed standards for how digital assets are issued, backed, and traded making the kingdom among the first in the Gulf to do so. The CBB says the aim is to make cryptocurrencies “trustworthy financial tools” while keeping investor protection at its core.
“By encouraging the development and adoption of innovative financial technologies, the CBB aims to enhance Bahrain’s position as a leading financial hub in the MENA region," - Mohamed Al Sadek, Executive Director of Market Development, CBB. The law comes after months of consultation with fintech firms and banks. Officials say the aim is not to flood the market with tokens, but to attract serious players who can use crypto to make payments, boost trade, and widen access to finance.
Why the move matters
Until now, Bitcoin trading in Bahrain existed under generic fintech rules. The new law closes that gap, spelling out:
A lab for the Gulf’s digital future
Bahrain is leveraging its size as an advantage. Unlike heavyweight neighbours with multiple regulators and slower gears, Manama can pilot new ideas and course-correct quickly. Officials say the stablecoin law is just the opening move; tokenised bonds, smart-contract payments and even central bank digital currency pilots are on the drawing board.
Analysts note that this agility could allow Bahrain to become a sandbox hub for crypto policy, testing guardrails that others, from Riyadh to Brussels, might later adopt.
Who wins and who adjusts
For startups, the message is clear: clean books and robust audits are no longer optional. Exchanges that once operated on goodwill must now document reserves, run regular security checks and prove that redemption is possible at all times.
Remittance providers and payment apps heavy users of stablecoins see an upside: fewer doubts about liquidity and counterparty risk.
Investors, meanwhile, may find Bahrain a safer gateway into Bitcoin. By spelling out how custodians must handle assets, the framework limits the “rug pull” risk that has plagued parts of the global market.
A small state’s big bet
Bahrain’s approach is less about out-regulating its neighbours than about making credibility its currency. In an arena where hype often eclipses caution, that may prove the smartest trade of all. If the model works, it won’t just give Bahrain a slice of the crypto boom; it could offer a roadmap for how open economies Gulf or otherwise can let Bitcoin breathe without letting risk run wild.
“By encouraging the development and adoption of innovative financial technologies, the CBB aims to enhance Bahrain’s position as a leading financial hub in the MENA region," - Mohamed Al Sadek, Executive Director of Market Development, CBB. The law comes after months of consultation with fintech firms and banks. Officials say the aim is not to flood the market with tokens, but to attract serious players who can use crypto to make payments, boost trade, and widen access to finance.
Why the move matters
Until now, Bitcoin trading in Bahrain existed under generic fintech rules. The new law closes that gap, spelling out:
- Stablecoins must keep 1:1 backing in cash or similar high-quality liquid assets, stored in segregated accounts.
- Issuers must hold minimum paid-up capital (BHD 250,000) and submit annual audits.
- Exchanges and custodians must comply with anti-money-laundering standards, cybersecurity measures, and investor-redemption guarantees.
A lab for the Gulf’s digital future
Bahrain is leveraging its size as an advantage. Unlike heavyweight neighbours with multiple regulators and slower gears, Manama can pilot new ideas and course-correct quickly. Officials say the stablecoin law is just the opening move; tokenised bonds, smart-contract payments and even central bank digital currency pilots are on the drawing board.
Analysts note that this agility could allow Bahrain to become a sandbox hub for crypto policy, testing guardrails that others, from Riyadh to Brussels, might later adopt.
Who wins and who adjusts
For startups, the message is clear: clean books and robust audits are no longer optional. Exchanges that once operated on goodwill must now document reserves, run regular security checks and prove that redemption is possible at all times.
Remittance providers and payment apps heavy users of stablecoins see an upside: fewer doubts about liquidity and counterparty risk.
Investors, meanwhile, may find Bahrain a safer gateway into Bitcoin. By spelling out how custodians must handle assets, the framework limits the “rug pull” risk that has plagued parts of the global market.
A small state’s big bet
Bahrain’s approach is less about out-regulating its neighbours than about making credibility its currency. In an arena where hype often eclipses caution, that may prove the smartest trade of all. If the model works, it won’t just give Bahrain a slice of the crypto boom; it could offer a roadmap for how open economies Gulf or otherwise can let Bitcoin breathe without letting risk run wild.
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