Bahrain’s Central Bank Grants In-Principle Stablecoin Approval to AX Coin, Marking First Under New Framework

Implementing Bahrain’s 2025 Stablecoin Framework

In July 2025, the Central Bank of Bahrain introduced a comprehensive regulatory regime governing fiat-backed stablecoins under Volume 6 of its Rulebook. The SIO Module established a dedicated licensing pathway for issuers seeking to operate within the Kingdom under direct central bank supervision.

The framework sets out requirements covering:

- Capital adequacy

- Corporate governance

- Reserve asset safeguarding

- Risk management and operational resilience

- Disclosure and reporting obligations

- Ongoing supervisory oversight

The regime permits issuance of single-currency stablecoins backed 1:1 by the Bahraini dinar (BHD), the U.S. dollar (USD), or other currencies approved by the CBB.

At the time of its introduction, Bahrain positioned the SIO framework as one of the first purpose-built stablecoin regulatory regimes in the GCC. AX Coin’s in-principle approval now represents the first visible regulatory action under that framework.

From Policy to Licensing

Unlike sandbox-based approaches or multi-authority regulatory structures seen in some jurisdictions, Bahrain’s model places stablecoin issuance directly under the supervision of the central bank.

By granting in-principle approval, the CBB indicates that AX Coin has met preliminary licensing standards under the SIO regime. Final approval will depend on the completion of additional compliance, operational, and supervisory requirements.

The move signals Bahrain’s transition from regulatory framework design to supervised market implementation.

Corporate Announcement and Regional Ambitions

In a LinkedIn post announcing the milestone, AlloyX Group confirmed receipt of the in-principle approval letter from the Central Bank of Bahrain.

Dr. Thomas Zhu, Co-Founder and CEO of AlloyX Group, stated that the company looks forward to “launching a compliant stablecoin within the regulatory framework and driving the development of AlloyX Group’s stablecoin ecosystem across the Middle East and Africa (MEA) region and beyond.”

The announcement follows high-level meetings held on January 19, 2026, between AlloyX executives and Bahrain’s Minister of Finance and National Economy, as well as senior officials from the Central Bank of Bahrain. Discussions centered on advancing digital asset infrastructure and reinforcing Bahrain’s role as a regulated digital finance hub.

While AlloyX Group operates through licensed financial entities in multiple jurisdictions globally, the Bahrain authorization represents the first publicly disclosed stablecoin-specific regulatory approval tied directly to AX Coin.

Details Yet to Be Disclosed

The company has not yet disclosed:

- The specific currency backing of AX Coin

- The structure and composition of its reserve assets

- The blockchain infrastructure supporting issuance

- A confirmed launch timeline

Final approval from the Central Bank of Bahrain will be required before the stablecoin can be issued to the market.

A Regulatory Milestone for Bahrain

With this decision, the Central Bank of Bahrain operationalizes its 2025 stablecoin framework for the first time.

The in-principle approval of AX Coin provides the first practical test of how Bahrain’s central bank–led stablecoin regime functions in real-world licensing conditions. Whether AX Coin evolves into a regional payments instrument or remains jurisdiction-focused will depend on final regulatory clearance and market adoption.

For now, Bahrain’s stablecoin framework moves from policy architecture to active supervision.

The in-principle approval of AX Coin marks a major milestone for Bahrain’s stablecoin framework, demonstrating the Kingdom’s commitment to regulated digital finance. As AX Coin progresses toward full licensing, it sets a precedent for future stablecoin issuances under central bank supervision, positioning Bahrain as a leading hub for compliant, secure, and innovative digital assets in the Middle East and Africa region.