Is crypto legal in Bahrain? Rules & regulation (2026)

Legal framework

Central Bank of Bahrain (CBB) Rulebook Volume 6 (Capital Markets) — Crypto-Asset (CRA) Module, Stablecoin Issuance and Offering (SIO) Module, together with the CBB and Financial Institutions Law No. 64 of 2006 and applicable AML/CFT decrees. NBR guidance sets VAT treatment.

Status by sub-area

• Stablecoins

  In force

  Since July 2025, the SIO Module in CBB Rulebook Volume 6 provides a dedicated licensing regime for stablecoin issuers, permitting single-currency fiat-backed stablecoins in BHD, USD or other CBB-approved fiats, with 1:1 segregated reserves, redemption rights, external audit, and governance/technology standards.

• Exchanges / VASP

  In force

  Crypto-asset exchanges are regulated as CBB Category 4 licensees under the CRA Module, with dedicated conduct-of-business, market-integrity, capital and governance rules, plus local Bahraini Joint Stock Company (B.S.C.) presence.

• Token Offerings

  In force

  Since 2023, CRA-15 governs digital token offerings: issuers must classify tokens (asset, utility, hybrid, payment), publish a whitepaper following a CBB-prescribed template, and where a token is a security, comply with CBB Law prospectus and disclosure obligations.

• Custody

  In force

  Crypto custody services are a regulated activity under CRA-8: custodians (Cat 2, 3 or 4) must segregate client assets, operate recoverable wallets, meet cybersecurity/keyman requirements and hold appropriate insurance.

• DeFi

  Partial

  Bahrain has no bespoke DeFi framework. Where a DeFi activity (lending, dealing, exchange, custody, portfolio management) is carried on by way of business in or from Bahrain, the general CRA Module applies and a CBB licence is required; there is no explicit carve-out for decentralized protocols or DAOs.

  Still pending: No bespoke DeFi framework; regulatory status of DAOs/protocols unclear

• Tax

  Partial

  Bahrain levies no personal income tax or capital gains tax, so individuals' crypto trading, staking or mining gains are effectively untaxed. VAT (10%) applies token-by-token per NBR's Financial Services VAT Guide: mining rewards outside scope, utility tokens treated as vouchers, asset tokens generally exempt as financial services, hybrid tokens case-by-case.

How to get a crypto license in Bahrain

To provide crypto-asset services in Bahrain you need a Crypto-Asset Services licence under the CBB Rulebook, supervised by the Central Bank of Bahrain (CBB), under the CBB Rulebook Volume 6, Crypto-Asset (CRA) Module.

Authority

the Central Bank of Bahrain (CBB)

License required

a Crypto-Asset Services licence under the CBB Rulebook

Framework / law

the CBB Rulebook Volume 6, Crypto-Asset (CRA) Module

Minimum capital

tiered by licence category (Category 1–4), from around BHD 25,000 up to BHD 300,000

Timeline

roughly 3–6 months across the pre-application and licensing stages

Cost

CBB application and annual licensing fees that scale with the licence category

Passporting

No: a Bahrain crypto-asset licence is national, though it is often used as a GCC base.

Bahrain was an early Gulf mover with a dedicated crypto-asset regime under the Central Bank of Bahrain.

Key points: crypto & digital assets in Bahrain

1. 01Dedicated CRA Module & 4-tier licensing

   Volume 6 CRA Module licenses four categories of crypto-asset service providers: Cat 1 advisory/order-transmission, Cat 2 agency/custody/portfolio management, Cat 3 principal dealing, Cat 4 crypto-asset exchange (only Cat 4 may operate an order-book venue and only Cat 4 must be a Bahraini Joint Stock Company B.S.C.). Minimum paid-up capital ranges from BD 25,000 (Cat 1) to BD 300,000 (Cat 4), with three months' operating expense liquidity.

   cbb.gov.bh cbb.gov.bh

2. 02Stablecoin regime (SIO Module) live from July 2025

   On 4 July 2025 the CBB issued the Stablecoin Issuance and Offering (SIO) Module, permitting single-currency fiat-backed stablecoins denominated in BHD, USD or other CBB-approved currencies. Issuers must hold 1:1 reserves in high-quality liquid assets in segregated accounts with authorized custodians, subject to annual external audit.

   cbb.gov.bh cbben.thomsonreuters.com

3. 03Digital token offerings framework (2023)

   Amendments introduced in March 2023 added CRA-15 covering Digital Token Offerings, defining 'Digital Tokens' as asset or utility tokens meeting the definition of securities under CBB Law. Issuers must classify each offering, publish a whitepaper meeting a prescribed template, and where the token is a security, comply with CBB securities-law prospectus/disclosure requirements.

   cbb.gov.bh cbben.thomsonreuters.com

4. 04Custody & client-asset segregation

   CRA-8 requires custody licensees to segregate client crypto-assets from firm assets, separate personnel/systems/controls from other lines, ensure no orphaned wallets (all wallets must be recoverable), manage keyman risk with insurance and business-continuity plans, and follow enhanced due diligence at onboarding.

   cbben.thomsonreuters.com cbb.gov.bh

5. 05Tax: no income/CGT on individuals; VAT applies token-by-token

   Bahrain has no personal income tax or capital gains tax, so individual crypto trading/investing/mining gains are untaxed. The National Bureau for Revenue's Financial Services VAT Guide (updated 1 Jan 2022) treats mining rewards as outside VAT scope, treats utility tokens like vouchers, generally exempts asset tokens as financial services, and treats hybrid tokens case-by-case.

   bdo.global crowe.com

6. 06Perimeter: license required to serve Bahrain market

   No person may market or carry on regulated crypto-asset services by way of business within or from Bahrain without a CBB licence. The CBB has up to 60 days to decide on a licence application, and firms must comply with governance, risk, AML/CFT, cybersecurity, market-integrity, reporting and conduct rules on an ongoing basis.

   tamimi.com cbben.thomsonreuters.com

Crypto license in Bahrain: FAQ

Timeline of decisions

1. 28 Jan 2026Decision
   AX Coin granted first in-principle stablecoin license under SIO framework

   The CBB issued an in-principle license approval to AX Coin (Solowin/AlloyX) to issue a fiat-backed stablecoin, the first applicant to advance under the 2025 Stablecoin Issuance and Offering framework, subject to final approval.

   GlobeNewswire (Solowin Holdings)

2. 4 Jul 2025Law · official
   CBB issues Stablecoin Issuance and Offering (SIO) Module

   Bahrain became the first GCC state to adopt a dedicated framework licensing issuers of fiat-backed (BHD, USD or other approved currency) stablecoins, requiring a 1:1 reserve ratio and rules on minting, redemption and reserve management.

   Central Bank of Bahrain

3. 23 Jan 2025Decision · official
   CBB grants Category 3 crypto-asset license to Fasset Financial Services

   Fasset received a Crypto-Asset Service Provider Category 3 license to offer crypto trading services, the fifth such license since the first Category 3 license was issued in 2020, illustrating the maturing licensing pipeline under the CRA Module.

   Central Bank of Bahrain

4. 3 Apr 2024Decision
   Bahrain grants crypto license to new institutional digital-asset platform

   The CBB licensed a digital-asset trading platform co-founded by a former Goldman Sachs partner, signaling continued institutional interest in Bahrain's crypto regime under the CRA Module.

   CoinDesk

5. 1 Mar 2023Law · official
   CBB amends CRA Module to regulate Digital Token Offerings

   Following industry consultation, the CBB expanded the crypto-asset framework to cover digital token offerings, treating security-like tokens as securities and adding definitions (asset/utility tokens, whitepaper rules) and stronger cybersecurity requirements.

   Central Bank of Bahrain

6. 31 Jul 2019Decision · official
   Rain becomes Middle East's first licensed crypto exchange

   After graduating from the CBB regulatory sandbox, Rain obtained a Crypto-Asset Module license, becoming the first fully licensed and regulated cryptocurrency exchange in the region.

   Bahrain Economic Development Board

7. 1 Feb 2019Law · official
   CBB issues final Crypto-Asset Module (CRA) rules

   The CBB published final rules establishing Bahrain's licensing and supervisory regime for crypto-asset services and exchanges within Volume 6 of its Rulebook, covering licensing, capital, AML/CFT, custody, conduct and cybersecurity.

   Central Bank of Bahrain

8. 1 Jun 2017Guidance · official
   CBB launches FinTech regulatory sandbox

   The CBB introduced a regulatory sandbox allowing firms (including crypto and blockchain startups) to test products under supervision, the foundational step that enabled Bahrain's later crypto licensing regime.

   Bahrain Economic Development Board

Sources

1. 1.cbb.gov.bh/wp-content/uploads/2022/08/Vol-6-CRA.pdf
2. 2.cbb.gov.bh/media-center/central-bank-of-bahrain-issues-framework-for-regulating-
3. 3.cbben.thomsonreuters.com/sites/default/files/net_file_store/Vol_6_SIO_July_2025.pdf
4. 4.cbb.gov.bh/media-center/central-bank-of-bahrain-issues-final-rules-on-crypto-ass
5. 5.cbb.gov.bh/media-center/cbb-issues-a-new-regulatory-framework-for-digital-tokens
6. 6.tamimi.com/law-update-articles/central-bank-of-bahrain-issues-regulations-govern
7. 7.cbben.thomsonreuters.com/rulebook/cra-15-digital-tokens
8. 8.cbben.thomsonreuters.com/rulebook/cra-8-crypto-asset-custody-services
9. 9.bdo.global/en-gb/microsites/tax-newsletters/indirect-tax-news/issue-2-2022/bahra
10. 10.crowe.com/ae/news/bahrain-guidance-on-vat-for-cryptocurrencies
11. 11.cbben.thomsonreuters.com/rulebook/crypto-asset-license