Global Praise for Stablecoin Rules
Bahrain's new stablecoin framework has received a major endorsement from Fitch Ratings, with the agency's Global Head of Islamic Finance calling it a landmark model for the region's digital economy, especially in the Sharia-compliant space. Bashar Al-Natoor praised the Central Bank of Bahrain's (CBB) initiative as a forward-looking move that strengthens the Kingdom's bid to remain a progressive financial hub in the GCC.
Sharia-first standards
What distinguishes the Stablecoin Issuance & Offering (SIO) Module, Al-Natoor said, is its clear guidance for both conventional and Islamic digital assets. He highlighted the inclusion of AAOIFI standards and independent Sharia advisement as a precedent rarely seen in global frameworks.
He said the approach could help build deeper market trust and support compliance among faith-based and ethical investors.
Investor confidence boost
Al-Natoor said Bahrain's framework is not just about regulatory control but a catalyst for innovation. He expects the rules to encourage new digital products and cross-border activities by providing businesses and consumers with safer access to tokenised assets.
The framework also introduces full transparency for yield-bearing stablecoins. While conventional issuers may offer passive income from interest, Sharia-compliant issuers must draw returns from activities permitted under Islamic law.
Bahrain's fintech play
The move comes as Bahrain continues to expand its Islamic fintech base, supported by regulations that enable services such as crypto-asset platforms and buy-now-pay-later solutions.
Al-Natoor noted that while challenges remain, including cybersecurity and supervision, the framework's alignment with global reporting standards could help attract institutional partnerships.
The module requires stablecoin issuers to prepare financial statements under either International Financial Reporting Standards (IFRS) or AAOIFI, depending on their compliance route.
'This framework not only underscores Bahrain's leadership ambitions but may also bring clarity and confidence for stablecoin investors and issuers,' Al-Natoor said.
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