Bahrain encourages the adoption of innovative financial technologies with a proactive regulatory approach and a crypto-friendly environment. Not only have global cryptocurrency exchanges and blockchain firms set up operations in the country, but several local financial institutions and startups are also exploring blockchain technology and cryptocurrency services in Bahrain.
Legal Aspects of Crypto Industry in Bahrain
Crypto firms find Bahrain’s regulatory environment supportive of digital asset services. For example, Bahrain has long established a regulatory sandbox that allows crypto and fintech businesses to test their products and services in a controlled environment with regulatory oversight. Crypto-asset companies currently comprise over 15% of Bahrain’s regulatory sandbox.
In 2019, the Central Bank of Bahrain (CBB) issued a comprehensive set of regulations called the “CBB Crypto-Asset Module” which covers various aspects of the crypto industry, including licensing, governance, minimum capital requirements, risk management, anti-money laundering (AML), and consumer protection.
The country’s Telecommunications Regulatory Authority (TRA) also has a separate Innovation Licence focusing on Wi-Fi 6, blockchain, Internet of Things (IoT), Augmented Reality/Virtual Reality/Extended Reality (AR/VR/XR), digital twin, and millimeter (extremely high-frequency) technology.
The Crypto-Asset Module provides clear guidelines and requirements for licensing and regulating crypto-asset services in the country. To obtain a license, a crypto exchange must submit a detailed application to the CBB. Besides, a crypto-asset trading platform must have a minimum capital of BHD 200,000 (approximately USD 530,000) to apply for a license.
Licensed Crypto Exchanges in Bahrain
Bahrain’s regulator ensures that licensed crypto exchanges have robust risk management and governance structures in place. Therefore, trusted crypto exchanges in Bahrain must always ensure the integrity and security of their platforms, safeguard client funds, and maintain transparent operations.
Although complying with legal requirements might be daunting and challenging for crypto businesses, customers who deal with licensed crypto exchanges get higher levels of protection and trust. Here are some of the licensed Crypto Asset Service Providers (CASPs) in Bahrain.
Binance Bahrain
Binance Bahrain received a Category 4 license as a crypto-asset service provider (CASP) from the Central Bank of Bahrain (CBB) in 2022. The license enables the regional division of the global crypto exchange to provide a full range of crypto-asset exchange services. Binance is one of the most popular cryptocurrency exchanges in the world. Its mobile app amassed over 6.3 million downloads in the first quarter of 2024, topping the crypto app downloads rating. The platform supports up to over 500 cryptocurrencies and is available in more than 180 countries. Binance also provides a crypto wallet for traders to store their digital funds.
Rain
Bahrain-headquartered Rain is a licensed and trusted crypto exchange in the Middle East and Turkey. The platform allows customers to buy, sell, and store crypto in a secure environment on its website and mobile apps. It has a Pro version for advanced traders with interactive charts, order books, and live trade history as well. The company was founded in 2017 and launched publicly in 2019 with its license from the Central Bank of Bahrain. The majority of cryptocurrency funds held by Rain are stored offline in a proprietary Cold Storage system. Rain also uses bank-grade security and encryption to protect customer funds and transactions.
Kraken
Founded in 2011, Kraken has about nine million clients across 60 countries. It has gained a virtual asset trading license for the MENA region via the Abu Dhabi Global Market (ADGM) allowing the crypto exchange to operate as a broker-dealer of virtual assets in the region. Kraken supports over 200 cryptocurrencies and is available in over 190 countries. It offers advanced trading tools and features, such as margin trading, futures trading, and stop-loss orders, as well as staking and wallet storage. For beginner traders, the platform provides educational resources as well.
Bybit
Established in 2018 in Singapore, Bybit has quickly grown to become one of the leading platforms in the crypto derivatives market. The firm’s headquarters have been in Dubai since 2023, and it complies with Bahraini regulatory standards after getting an IPA (approval in principle) to conduct virtual asset business in the UAE. The platform offers over 940 digital assets and a wide choice of investment strategies, including futures contracts with up to 25x leverage and staking options. It is particularly appealing to derivatives traders. Bybit supports customers across over 160 countries in over 16 languages.
CoinMENA
CoinMENA is a Sharia-compliant digital asset exchange company licensed and regulated by the Central Bank of Bahrain. The company holds a category-3 crypto asset service provider license from the CBB, which allows it to offer services to users across the member countries of the Gulf Cooperation Council. It also secured a Virtual Asset Service Provider (VASP) license for VA Broker-Dealer services from Dubai’s Virtual Assets Regulatory Authority (VARA). CoinMENA enables retail and institutional investors in the MENA region to buy, sell, send, receive, and store over 40 digital assets, as well as deposit and withdraw funds in their local currency.
OKX
OKX is regulated by the Dubai Virtual Assets Regulatory Authority (VARA) and available in Bahrain. The platform offers staking, options trading, futures trading, and other popular trading features. OKX lists over 350 cryptocurrencies and supports more than 500 trading pairs. Besides, the crypto exchange hosts an NFT marketplace and several dApps. A key benefit of OKX for DeFi users is the OKX Wallet, which integrates with top DeFi protocols, facilitating higher staking yields and seamless transactions. Its services are available to both retail and institutional users.
eToro
Crypto trading and investing platform eToro offers over 5,000 investing instruments, including 100+ cryptocurrencies, ETFs, crypto indices, and advanced trading tools such as the CopyTrader, which enables customers to automatically copy the moves and strategies of other trusted investors. The crypto exchange has been operating since 2007, with years of experience in the financial markets and numerous high-profile partnerships in the fintech space. It provides services in the MENA region being licensed and regulated by the Abu Dhabi Global Market (“ADGM”)’s Financial Services Regulatory Authority (“FSRA”).
