Market News

Central Bank of Bahrain Sets Standards with New Stablecoin Regulations

The Central Bank of Bahrain (CBB) has taken a significant step by unveiling its first regulatory framework specifically for stablecoin issuance.

This new framework positions Bahrain as a leader in stablecoin regulation within the region.

It mandates that all stablecoins must be fully backed by fiat currencies, primarily the Bahraini Dinar or the U.S. Dollar.

Issuers are required to maintain a strict 1:1 reserve ratio and adhere to high standards concerning asset quality and liquidity.

Additionally, the CBB has instituted requirements for annual audits along with enhanced cybersecurity measures.

Issuers will also need to demonstrate robust governance, risk management, and transparency, with a minimum capital requirement set at BHD 250,000.

This regulatory move aims to promote institutional participation in the crypto sector, furthering Bahrain's ambitions as a financial hub.

Moreover, alongside these regulations, Binance's subsidiary BPay Global has been granted a payment service license, emphasizing the country's commitment to crypto finance.

As global competition intensifies, with entities like AllUnity preparing compliant stablecoins in Europe, Bahrain's regulations may set a precedent for neighboring regions.

These developments indicate a pivotal shift in the landscape of stablecoins, potentially influencing regulatory practices and adoption on a global scale.