Regulatory AlertsBahrain: crypto & digital assets regulation
RegulatedBahrain regulates crypto via CBA's Module CRA; strict licensing for exchanges and custody
- Lead regulator
- Central Bank of Bahrain (CBA)
- Also involved
- Securities and Commodities Authority (SCA) for securities tokens
- Core law
- CBA Crypto-Asset Module (Module CRA)
- Entry capital
- BHD 500,000 (Investment Firm)
- Approval timeline
- 3-6 months
- Customer assets
- Segregated in licensed custodian accounts
- Data protection
- Personal Data Protection Law 2018 · PDPA
- Sandbox
- Yes - CBA Regulatory Sandbox
Bahrain maintains a comprehensive regulatory framework for crypto-assets under the Central Bank of Bahrain (CBA). The CBA Crypto-Asset Module (Module CRA) governs licensing, capital adequacy, and operational standards for entities providing crypto-asset services. The regime is strict, requiring specific licenses for exchanges, custody, and issuance, with a strong emphasis on cybersecurity and anti-money laundering compliance.
Which licence do you need?
| Your activity | Requirement | Capital | Timeline | Authority |
|---|---|---|---|---|
| Exchange / trading platform | LicenceInvestment Firm License (Crypto-Asset Services)[1][2] Requires robust cybersecurity and transaction monitoring systems | BHD 500,000 | 3-6 months | Central Bank of Bahrain |
| Custody of client assets | LicenceInvestment Firm License (Crypto-Asset Services)[1] Strict custody and segregation rules apply under Module CRA | BHD 500,000 | 3-6 months | Central Bank of Bahrain |
| Token issuance / public offering | LicenceInvestment Firm License / SCA Approval[1] Digital token offerings require CBA licensing and SCA oversight if securities | BHD 500,000 | 3-6 months | Central Bank of Bahrain / SCA |
| Broker-dealer / OTC desk | LicenceInvestment Firm License[1] OTC desks fall under investment firm licensing for crypto services | BHD 500,000 | 3-6 months | Central Bank of Bahrain |
| Stablecoin issuance | LicenceInvestment Firm License[1] Issuance treated as crypto-asset service requiring full license | BHD 500,000 | 3-6 months | Central Bank of Bahrain |
| Crypto payments acceptance | LicencePayment Service Provider License[3][1] Crypto payments require PSP license with crypto-asset module compliance | BHD 500,000 | 3-6 months | Central Bank of Bahrain |
| Mining / staking services | Uncertainverify with regulator Not explicitly detailed in provided documents | — | — | — |
| Advisory / portfolio management | LicenceInvestment Firm License[1] Advisory on crypto-assets requires investment firm license | BHD 500,000 | 3-6 months | Central Bank of Bahrain |
New — what changed recently
- 2024-01-28Proposed Amendments to Cyber Security Requirements — Strengthened cybersecurity framework for crypto-asset licensees and payment service providers[3]
- 2023-08-23Amendments to Crypto-asset Module (Module CRA) — Mandated Cyber Hygiene Practices for licensed crypto-asset entities[4]
- 2022-09-08Amendments to the Crypto-Asset Module — Established comprehensive licensing framework for crypto-asset services and digital tokens[1]
Market-entry checklist
- 1Apply for Investment Firm LicenseSubmit application to CBA with BHD 500,000 minimum capital for crypto-asset services
- 2Implement Cyber Hygiene StandardsAdopt CBA-mandated cybersecurity frameworks and submit feedback on Module CRA amendments
- 3Deploy Transaction MonitoringInstall systems to verify origin and destination of all crypto-asset transfers per Financial Crime Module
- 4Segregate Customer AssetsEnsure all customer crypto-assets are held in segregated accounts with licensed custodians
- 5Engage SCA for Securities TokensIf issuing securities tokens, coordinate with the Securities and Commodities Authority for dual compliance