The Central Bank of Bahrain has just announced the licensing and management framework for stablecoin issuers to ensure the safe integration of stablecoins into the financial system.

The new legal framework allows licensed entities to issue fiat-backed stablecoins, guaranteed by the Bahraini dinar, US dollars, or other approved fiat currencies, thereby minimizing risks and enhancing investor confidence.

MAIN CONTENT

  • Bahrain introduces new regulations on stablecoin licensing, focusing on minimizing related risks.

  • Permitted stablecoins are fiat-backed types, guaranteed by approved fiat currencies.

  • The policy aims to strengthen Bahrain's position as a financial hub in the Middle East.

What changes has the Central Bank of Bahrain announced regarding stablecoin management?

With deep knowledge of the financial market, the Central Bank of Bahrain officially issued the licensing framework and control of stablecoin issuance starting from July 4, 2024, to ensure safety and transparency for this cryptocurrency.

This regulatory framework aims to reduce risks from unregulated stablecoins while protecting investors and promoting sustainable development in the emerging financial sector in Bahrain.

What are the details about the types of stablecoins allowed to be issued under this regulation?

The new regulations allow licensed organizations to issue fiat-backed stablecoins guaranteed by the Bahraini dinar, US dollars, or other approved fiat currencies, recognizing expertise in the safe and transparent management of digital assets.

Limiting the types of issued stablecoins to fiat-backed ones helps minimize volatility risks and ensure stability for the financial system, thereby enhancing investor confidence.

Establishing a regulatory framework for stablecoins marks an important advance in reinforcing Bahrain as a leading financial center in the Middle East while protecting investor rights and enhancing market transparency.
Mr. Khalid Hamad, Executive Director of Market Development at the Central Bank of Bahrain, July 4, 2024

How does the new legal framework contribute to Bahrain's financial position?

Financial experts in Bahrain state that the legal framework for stablecoins is a breakthrough in enhancing trust and comprehensive control over the digital asset sector, reflecting the commitment to protect investors and promote market transparency.

According to a report from the Capital Market Supervision Board of Bahrain, this policy will strengthen Bahrain's position as an innovative and sustainable financial center in the Middle East, attracting investment capital and new technologies into the financial sector.

The issuance of a comprehensive legal framework for the digital asset market like stablecoins is Bahrain's affirmation of its responsibility and vision in managing the modern financial market.
Mr. Faisal AlSuwaidi, Head of Capital Market Supervision, July 4, 2024

What are the main benefits of licensing stablecoins for investors and the financial market?

Strict management of stablecoins through licensing helps minimize legal and financial risks for investors while increasing transparency, making the market more sustainable and attractive.

Many financial analysts believe that this policy will promote the development of new financial products, helping to diversify investment portfolios and expand the cryptocurrency ecosystem in the region.

What are the next steps in implementing and supervising stablecoins in Bahrain?

The Central Bank of Bahrain is expected to closely collaborate with regulatory agencies and financial organizations to implement the new legal framework, oversee the issuance of stablecoins, and ensure full regulatory compliance.

They also organize many fintech events to share knowledge and attract cooperation from financial technology developers in building a sustainable and secure ecosystem.

Frequently Asked Questions

  • What are the main contents of Bahrain's new legal framework?
    The regulations include licensing for the issuance of fiat-backed stablecoins to enhance safety and transparency.

  • Which types of currencies are the licensed stablecoins in Bahrain backed by?
    The permitted stablecoins must be backed by the Bahraini dinar, US dollars, or other approved fiat currencies.

  • How does this regulation affect investors?
    It helps reduce risks and enhance confidence through strict and transparent management of stablecoin issuance.

  • How does Bahrain position itself in the cryptocurrency finance sector after this regulation?
    Bahrain aims for a position as a center for innovative, sustainable finance and investment attraction in the Middle East.

  • What are the next plans of the Central Bank of Bahrain?
    Enhancing supervision and cooperation to develop the fintech ecosystem, ensuring compliance and safety for the cryptocurrency market.

Source: https://tintucbitcoin.com/bahrain-cong-bo-khung-phap-ly-stablecoin/

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