The Central Bank of Bahrain (CBB) has issued the region’s first dedicated Stablecoin Issuance and Offering (SIO) Module, setting out a detailed framework for the licensing, regulation, and oversight of fiat-backed stablecoins in the Kingdom.
For financial institutions, fintech platforms, and virtual asset service providers, the new framework brings clarity and structure to a previously undefined space, introducing clear rules around:
- Licensing and capital requirements
- Currency backing and reserve obligations
- Consumer protection and redemption rights
- Audit, disclosure, and reporting standards
- Ongoing compliance, governance, and cybersecurity
- Services incidental to issuance and offering of stablecoin
Only entities licensed and approved by the CBB may issue or offer stablecoins in Bahrain.
Reserves must be held in segregated accounts and backed by high-quality liquid assets such as AA-rated bank deposits, central bank instruments, or short-term sovereign debt.
Why it matters:
The Rulebook positions Bahrain as a leader in digital asset regulation in the region. However, it also sets a high bar, with regulatory obligations comparable to those imposed on traditional financial institutions.
How we can help:
Our team can help clients on CBB licensing, governance frameworks, compliance, and stablecoin offerings under the new SIO Module.
To learn more about what this means for your licensing or compliance obligations, please contact our team at: asarbh@asarlegal.com.
