The Central Financial institution of Bahrain (CBB), having issued a session paper on stablecoins again in October 2024, has now issued the complete stablecoin regulation on July 2nd, 2025. The CBB is providing licenses to stablecoin issuers and custodians for fiat-backed stablecoins that could possibly be both in Bahraini Dinar or United States {Dollars} or every other fiat foreign money acceptable to the CBB.
The Central Financial institution of Bahrain famous that following the session with the trade, the CBB is hereby issuing the Module and its appendices underneath CBB Rulebook Quantity 6 (See Module SIO and its appendices hooked up). The CBB famous that the brand new module will probably be efficient instantly.
CBB permits yield-bearing authorised stablecoins
Furthermore, the Central Financial institution of Bahrain is permitting stablecoin issuers to situation yield-bearing stablecoins that pay passive returns to their purchasers solely from both curiosity or rewards (for Sharia-compliant stablecoins), which is earned from the funding of the reserve property.
The CBB provides that stablecoin issuers providing a yield-bearing authorised stablecoin should set the yield price or reward price at a stage that’s cheap and doesn’t adversely have an effect on the steadiness of the authorised stablecoin, in addition to the monetary well being (going concern) of the stablecoin issuer.
CBB units stringent necessities for stablecoin issuers
As per the module, issuers in search of to supply stablecoins, management their complete provide, or mint and burn, in addition to handle and safeguard reserve property and custody of stablecoins, might want to meet the necessities set out.
Central Financial institution of Bahrain regulation calls on present licensed entities who want to provide regulated stablecoin providers to hunt written approval from the CBB earlier than providing the service. The doc states, “Stablecoin issuers should present the CBB with an in depth description of the brand new providers, the assets required, and the operational framework for such service.”
All service suppliers have to be licensed earlier than endeavor stablecoin providers.
The CBB notes that a part of the approval of a stablecoin will embrace trying into the standard and liquidity of the stablecoin, in addition to credit score and focus threat reserve property in these currencies. It additionally notes that the Central Financial institution could reject an software for issuance of a stablecoin if it determines that the issuance thereof may trigger harm, dilute, or be opposite to the pursuits of nationwide financial system, the holders of the stablecoin, or public traders generally.
Stablecoin reserves are money reserves in Banks with AA rankings
When it comes to reserve asset composition, stablecoin issuers can solely maintain reserves in money and deposits with Banks charges at a minimal of AA- or equal, or debt securities with the central financial institution, or repurchase agreements backed by short-term authorities cash market funds.
Additionally, candidates should have at the least a three-year monitor document in issuing stablecoins or working within the crypto asset area. As for the license charge, the CBB has initiated a variable annual license charge payable by stablecoin issuers, which is 0.25% of their related working bills, topic to a minimal charge of BD 5000 and a most charge of BD 12,000.
The CBB additionally particulars the necessities for governance and compliance and locations robust emphasis on this. As famous by the CBB, stablecoin issuers should have ample and applicable techniques and controls, in accordance with the necessities of the Anti Cash Laundering and Combating of Monetary Crime (AML) Module, CBB Rulebook Quantity 6, to forestall, detect, and fight cash laundering and terror financing.
Bahrain Central Financial institution laws go a lot additional than the UAE Central Financial institution stablecoin laws
The brand new stablecoin laws set by the Central Financial institution of Bahrain far exceed the stablecoin laws set by the UAE Central Financial institution. Whereas the UAE solely allowed AED stablecoins to be thought of as strategies of fee inside the nation, the CBB has allowed each Bahraini Dinar in addition to USD stablecoins, and even Sharia-compliant ones to be issued.
One other noteworthy distinction is that CBB has allowed for yield-bearing stablecoins, one thing that the UAE Central Financial institution didn’t point out in its laws.
