🇧🇭 Bahrain Approves Yield-Bearing Stablecoins Under Robust New Framework

On July 2, 2025, the Central Bank of Bahrain (CBB) officially released its long-awaited stablecoin regulations, marking a significant shift in the Gulf’s digital asset landscape. The new rules—under Volume 6 of the CBB Rulebook—allow for the issuance of fiat-backed stablecoins in BHD, USD, or other approved currencies, with strict oversight.

Critically, Bahrain becomes one of the first Gulf nations to permit yield-bearing stablecoins, provided returns stem from interest or Sharia-compliant rewards generated by reserve assets. These yields must be sustainable, not threaten the peg, nor the issuer’s financial health.

Issuers must meet stringent conditions: full licensing, robust AML controls, and clear governance. Reserve assets must be held in AA-rated banks or equivalent safe instruments, ensuring liquidity and investor protection. Applicants also need a proven three-year crypto or stablecoin track record.

Compared to the UAE—whose rules limit stablecoins to AED and exclude yield-bearing features—Bahrain’s framework is broader, more progressive, and tailored for both conventional and Islamic finance.

This bold move positions Bahrain as a rising regulatory hub in MENA’s crypto economy, blending financial innovation with risk management. All stablecoin activities must now be licensed and pre-approved by the CBB.

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