Bahrain has grown increasingly ambitious over the past few years as it bids to become a recognised powerhouse in financial innovation.
The country has pioneered innovative sandbox programmes since 2017 and has now established the region’s first dedicated stablecoin framework.
With that in mind, read on as we assess some of the latest developments in Bahrain.
Bahrain Dips its Toes into Stablecoins
Bahrain recently launched its Stablecoin Issuance and Offering (SIO) Module, a landmark moment in the country’s regulatory landscape.
Issuers can now release a single-currency stablecoin pegged to the Bahraini Dinar, the United States dollar or other fiat currencies approved by the Central Bank of Bahrain (CBB).
This rulebook enforces a one-to-one backing, separate reserves, yearly audits and clear redemption rights. Officials believe this regulation is a milestone for investor protection and market transparency, framing it as a new era for legitimising digital assets.
The framework shows Bahrain is ready to lock horns with heavyweight neighbours such as the United Arab Emirates (UAE) and Saudi Arabia to lead Middle Eastern innovation in digital finance.
Even though the UAE and Saudi Arabia have already attracted hedge funds and exchanges, Bahrain has chosen to bet on codified rules for stablecoins, luring firms that want more certainty.
Analysts believe Bahrain is following the same path as Singapore and Hong Kong, countries where clarity has led to rapid growth in the ecosystem.
A Growing Pipeline of Firms
Bahrain has been courting international investment. Officials disclosed that 52 financial service providers are currently in talks to establish roots in the country.
Intriguingly, almost half of the companies specialise in cryptocurrency or investment management.
This effort is part of plans to make financial services the largest non-oil contributor to Bahrain’s economy as it moves away from its reliance on hydrocarbons.
Executives at the Bahrain Economic Development Board noted that the country has several comparative advantages, including no personal income tax, 100 percent foreign ownership and a skilled workforce.
Renowned exchanges such as Binance and Crypto.com already secured local licenses, while BitOasis launched operations in 2025 after receiving CBB approval.
Bahrain is going all-in on digital assets, piquing the interest of global giants and regional innovators.
Gambling & Regulatory Implications
Bahrain is well aware that cryptocurrencies make it easier for citizens to gamble on offshore betting platforms.
Due to crypto’s decentralised nature, Bahraini citizens can gamble without leaving a digital footprint that traditional financial systems would typically flag.
Many local citizens who visit Bahrain sports betting site to fuel their passion use cryptocurrencies for deposits and withdrawals. Bettors love the speed offered by crypto payments.
Bahrain must not miss the opportunity to regulate the betting market to further diversify the local economy and reroute vital tax revenue back to government projects.
Regulating the betting industry would also enable Bahrain to protect its citizens more effectively.
Banking & Payment Integrations
For cryptocurrency to gain the recognition it deserves, it needs to become a mainstay in mainstream finance, and Bahrain is making significant progress in this regard.
Binance Bahrain has partnered with Singapore Gulf Bank (SGB) to provide direct USD transfers for retail customers. Users can link their bank accounts and move their funds in and out of Binance wallets in seconds.
Crypto.com recently signed a Memorandum of Understanding with Bahrain’s leading financial app, Beyon Money. This collaboration promises payment innovation, open banking and co-marketing of cards.
Customers may soon be able to purchase cryptocurrencies directly via Beyon Money while enjoying Crypto.com’s full suite of retail products.
ATME Emerges from the Shadows
Bahrain-based digital assets exchange ATME recently issued its first tokenised real-world asset, starting with gold-backed tokens.
Each token represents one kilogram of gold and is traded on ATME’s secondary market. It can also be redeemed for physical gold.
This initiative is designed to modernise the ownership of gold by removing storage and transportation while leveraging blockchain for efficiency and security.
The market for tokenised gold is worth around $1.2 billion, and ATME, which the Central Bank of Bahrain licenses, plans to expand its offerings to other classes.
By combining the timeless value of gold with blockchain technology, Bahrain is unlocking new ways for investors to access and trade high-value assets.
