In June 2026, AX Coin Bahrain B.S.C. (Closed) became the first company licensed by the Central Bank of Bahrain (CBB) under Bahrain’s regulatory framework for stablecoin issuers. The licence marks an important development for Bahrain’s financial-services sector and reinforces the Kingdom’s growing role as a regional centre for regulated digital assets.

AX Coin is the company authorised to develop and issue regulated stablecoins. Its proposed products include AXUSD, which is intended to maintain a value equivalent to one US dollar, and AXBHD, which is intended to maintain a value equivalent to one Bahraini dinar.

Stablecoins differ from many other cryptocurrencies because they are designed to maintain a relatively stable value. Their value is generally supported by reserve assets linked to an established fiat currency. This distinction is important when considering AX Coin’s proposed products. AX Coin is the licensed issuer, while AXUSD and AXBHD are the stablecoins it intends to issue. The CBB licence regulates the company’s stablecoin-issuer activities; it is not a guarantee of investment returns and should not be treated as an endorsement of every digital token that uses the name “AX.”

The licence places AX Coin under the regulatory supervision of the CBB. As a licensed issuer, the company must comply with requirements covering governance, capital adequacy, risk management, cybersecurity, anti-money-laundering controls, customer due diligence, reserve protection, auditing and regulatory reporting.

A central feature of Bahrain’s stablecoin framework is the requirement that an approved stablecoin be backed by eligible reserve assets with a value of at least 100 per cent of the stablecoins in circulation. Those reserves must be sufficiently stable and liquid, and they are subject to daily valuation and reconciliation. The issuer must also obtain monthly confirmation from an independent external auditor concerning the number of stablecoins in circulation and the amount, value and composition of the supporting reserves. The relevant report must be submitted to the CBB and published on the issuer’s website.

These requirements are intended to reduce some of the risks associated with unregulated stablecoins. They also provide customers, counterparties and financial institutions with greater visibility into the issuer’s reserves and the mechanisms supporting the stablecoin’s value.

For holders, the potential attraction of AXUSD or AXBHD would not be the prospect of substantial price appreciation. Instead, their value would lie in their possible use as regulated digital representations of established currencies. Subject to their official launch, availability and applicable terms, they could facilitate faster domestic and international transfers, digital payments outside conventional banking hours and more efficient movement of value between compatible platforms. They may also support corporate treasury functions, business-to-business settlements, remittances and certain cross-border transactions.

The CBB framework gives holders of approved stablecoins a direct legal right of redemption at par value. In ordinary circumstances, legitimate redemption requests should normally be completed within one business day, although the framework recognises that exceptional disruption circumstances may affect this process. Redemption will also remain subject to the relevant eligibility requirements, compliance procedures, fees and operational terms.

Holders should not, however, expect to receive interest or similar returns simply by holding an approved stablecoin. The CBB rules prohibit issuers from paying interest or offering comparable benefits merely to encourage customers to acquire or retain stablecoins. AXUSD and AXBHD should therefore be understood primarily as potential payment, settlement and value-transfer instruments rather than conventional investments designed to generate financial growth.

AX Coin’s licensing also illustrates the development of Bahrain’s digital-asset framework. The Kingdom’s regulatory approach is extending beyond the supervision of crypto-asset exchanges and service providers to include the issuance and offering of fiat-backed stablecoins. This creates clearer expectations concerning the authorisation of issuers, the quality and segregation of reserve assets, holders’ redemption rights, independent reserve verification, governance, cybersecurity, customer identification, transaction monitoring and disclosure through CBB-approved stablecoin whitepapers.

The framework also contemplates recovery and orderly-redemption arrangements if an issuer experiences financial or operational difficulties. These requirements give reputable businesses a lawful route to develop stablecoin products while enabling the CBB to monitor their financial soundness and protect the integrity of Bahrain’s financial system.

The licence may also help connect conventional banking with blockchain-based financial services. Regulated stablecoins could support institutional payments, remittances, corporate treasury operations, tokenised assets and cross-border settlements. AX Coin has announced collaborations and exploratory arrangements with organisations including The BENEFIT Company, Bank of Bahrain and Kuwait, INFINIOS, FOMO Pay and Fireblocks. These arrangements suggest institutional interest in developing secure and regulated stablecoin infrastructure, although each should be assessed according to its final legal and commercial terms.

For Bahrain, the development may attract fintech companies, payment providers, technology firms and institutional investors seeking to operate in a jurisdiction with a recognised regulatory framework. It also strengthens the Kingdom’s ability to participate in the international development of digital payments while maintaining regulatory oversight.

A CBB licence is an important safeguard, but it does not eliminate every financial, technological or operational risk. It does not mean that the CBB guarantees the stablecoin, protects holders against every possible loss or promises that its market value will never deviate from the relevant reference currency.

Before acquiring any AX stablecoin, prospective users should confirm that the particular product has been officially approved and launched, that it is being offered through the authorised issuer or an approved platform, and that the smart-contract address is genuine. They should also review the CBB-approved whitepaper, the latest published reserve-audit report, the applicable redemption rights and fees, the relevant eligibility requirements and whether the product is available to retail customers or intended principally for institutional use.

AX Coin’s CBB licence is an important milestone for Bahrain’s regulated digital-asset market. It provides a supervised structure for issuing fiat-backed stablecoins and introduces meaningful requirements relating to reserves, redemption, governance, auditing and customer protection.

For holders, the principal benefit is likely to be access to a regulated digital payment and settlement instrument rather than speculative investment returns. For Bahrain, the licence represents another step towards combining financial innovation with a credible and clearly defined legal framework.

This article is provided by Levant Business Management Services W.L.L. for general information only. It does not constitute financial, investment or legal advice, an invitation to purchase any crypto-asset, or a representation that AXUSD or AXBHD is presently available to the public. Prospective users should review the relevant CBB-approved documentation and obtain appropriate professional advice before entering into any transaction.

References

1. Central Bank of Bahrain, “Central Bank of Bahrain Issues Framework for Regulating Stablecoin Issuance,” 4 July 2025.

2. Central Bank of Bahrain, “CBB Rulebook, Volume 6: Stablecoin Issuance and Offering Module,” accessed 14 September 2026.

3. AXG/AlloyX, “AX Coin, Backed by AXG, Granted First Stablecoin Issuer Licence by the Central Bank of Bahrain,” 3 June 2026.

4. AXG/AlloyX, “AXG’s AX Coin and Singapore’s FOMO Pay Partner to Bring U.S. Dollar and Bahraini Dinar Stablecoins to Cross-Border Digital Payments,” 12 June 2026.

5. SOLOWIN HOLDINGS, “Annual Report on Form 20-F for the Financial Year Ended 31 March 2026,” filed with the United States Securities and Exchange Commission, 2026.

6. AXG/AlloyX, “AX Coin Pressroom: Partnerships, Technology and Stablecoin Developments,” accessed 14 September 2026.