The Central Bank of Bahrain (CBB) announced the launch of a new regulatory framework for licensing and regulating stablecoin issuers. This step aims to regulate this growing sector within the Bahraini financial system and ensure its safe, secure, and sustainable use.
Under the new framework, licensed crypto-asset issuers in Bahrain will be permitted to issue stablecoins fully backed by a single currency, whether the Bahraini dinar, the US dollar, or any other currency approved by the Central Bank in the future. This move comes in response to the rapid global developments in innovative digital and financial assets, and Bahrain’s efforts to consolidate its position as a leading regional financial center.
The CBB emphasized that the regulatory framework primarily aims to mitigate the risks associated with the use of unregulated stablecoins by providing a safe and transparent financial and investment environment. This will enhance the confidence of local and international users and investors, and contribute to driving the growth of the cryptocurrency sector according to clear regulatory rules.
In a statement on this occasion, Mr. Mohammed Al Sadiq, Executive Director of Market Development at the Central Bank of Bahrain, explained that this framework reflects the bank’s commitment to encouraging innovation in the field of financial technology and supporting the Kingdom’s efforts to strengthen its role as a major financial center in the Middle East and North Africa region. Al Sadiq affirmed the bank’s continued effective supervisory role to ensure the financial sector’s readiness to keep pace with future technological changes and address the associated challenges.
For his part, Mr. Ali Haroon Al Amer, Director of the Capital Markets Supervision Department at the Central Bank, indicated that including stablecoin activities within a clear regulatory framework is an important step towards ensuring transparency, protecting investors, and maintaining market stability. He added that through this step, the Central Bank seeks to enhance confidence in digital transactions and introduce global best practices in regulating crypto-assets, achieving a balance between innovation and regulatory security.
The issuance of this regulatory framework is part of Bahrain’s comprehensive strategy to support the digital economy and develop the financial technology sector, in line with its Economic Vision 2030, which focuses on diversifying national income sources, attracting more foreign investment, and developing the business environment according to the highest standards of transparency and governance.
