Bahrain Central Bank Unveils Comprehensive Stablecoin Regulations Including Yield-Bearing Options

Bahrain Takes the Lead with New Stablecoin Rules

The Central Bank of Bahrain (CBB) just made its move in the crypto space—and it’s a big one. After floating the idea in a consultation paper last October, the CBB has now rolled out full regulations for stablecoins as of July 2, 2025. The rules cover licensing for issuers and custodians, but there’s a catch: only fiat-backed stablecoins are allowed, whether pegged to the Bahraini dinar, US dollar, or other approved currencies.

What’s interesting here is how quickly this moved from proposal to reality. The CBB didn’t waste time—the new module, part of its Rulebook Volume 6, is already in effect. It’s almost like they’ve been waiting for the right moment to pull the trigger.

Yield-Bearing Stablecoins Get the Green Light

Here’s something you don’t see every day. The CBB is letting issuers offer stablecoins that earn yield—but with strict conditions. Returns can only come from interest (or rewards, for Sharia-compliant versions) generated by reserve assets. No speculative games, no risky bets.

But there’s a limit. The CBB warns issuers to keep yields “reasonable” so they don’t destabilize the coin—or the issuer itself. It’s a balancing act, really. Too high, and things could spiral; too low, and nobody cares.

Strict Rules for Issuers—No Shortcuts

Want to issue a stablecoin in Bahrain? Be ready for some heavy lifting. The CBB’s rules cover everything from managing reserves to minting and burning tokens. Even existing licensed firms need written approval before jumping in.

And the requirements don’t stop there. Issuers must spell out their operational framework, prove they can handle risks, and—this is key—keep reserves in top-rated banks (AA- or better) or government-backed securities. No shady corners here.

Oh, and forget about quick approvals if you’re new to the game. The CBB wants at least three years of stablecoin or crypto experience before even considering an application.

Why Bahrain’s Rules Stand Out

Compared to its neighbors, Bahrain’s approach is… ambitious. The UAE, for example, only allows AED-pegged stablecoins for domestic payments. Bahrain? It’s opening the door to USD-backed coins, Sharia-compliant options, and even yield-bearing ones—something the UAE’s rules don’t touch.

The CBB isn’t messing around with compliance either. Anti-money laundering controls are front and center, with strict systems required to flag suspicious activity.

One last thing: licensing isn’t free. Issuers will pay an annual fee—0.25% of operating expenses, capped at 12,000 Bahraini dinars. Not exactly loose change, but probably a fair trade for clarity in a market that’s still figuring itself out.

So, is this a game-changer? Maybe. At the very least, it puts Bahrain ahead of the curve—for now.