CBB was one of the first regulators globally to issue a comprehensive regulatory framework governing digital assets services. CBB issued the Crypto Assets Module ("CRA Rules") under its Capital Markets Rulebook in February 2019. The introduction of CRA Rules was in line with Bahrain's goal to develop a FinTech ecosystem that bolsters Bahrain's position as a financial hub in the MENA region. CBB also launched the FinTech Regulatory Sandbox (the "CBB Sandbox") in December 2021 which enables start-ups and FinTech firms (including VASPs) to test their technology-based innovative solutions / services, before scaling up their operations in Bahrain and across the region.


The CRA Rules regulate various digital assets services conducted in and from Bahrain, including dealing, broking, advisory, portfolio management, providing custody and operating a digital assets exchange. The CRA Rules specify, inter alia, the licensing requirements, the conditions for issuance and holding of CBB license, minimum capital requirements, measures to safeguard client assets, technology standards, cyber security requirements, risk management requirements, reporting, notifications and approval requirements, conduct of business obligations and rules for prevention of market abuse and manipulation.


The term 'Crypto-Asset' is defined under CRA Rules as "virtual or digital assets or tokens operating on a blockchain platform and protected by cryptography". The definition is inclusive and covers broadly four types of Crypto-Assets, namely: (i) Payment Tokens; (ii) Utility Tokens; (iii) Asset Tokens; and (iv) Hybrid Tokens.

Table 8: Types of Tokens – CBB

Tokens recognised by CBB Definition under CRA Rules
Payment Tokens Tokens (synonymous with cryptocurrencies) that are virtual currencies which are intended to be used, now or in the future, as a means of payment for acquiring goods or services or as a means of money or value transfer. Payment Tokens give rise to no claims on their issuer and are usually decentralised. For example, Bitcoin.
Utility Tokens Tokens that are intended to provide access to a specific application or service but are not accepted as a means of payment for other applications.
Asset Tokens Tokens that represent assets such as a debt or equity claim on the issuer. Asset Tokens promise, for example, a share in future company earnings or future capital flows. In terms of their economic function, Asset Tokens are analogous to equities, bonds or derivatives. Tokens which enable physical assets to be traded on the blockchain also fall into this category.
Hybrid Tokens Tokens that have features of one or more of the above three types of tokens.


Rule 1.1.1 of CRA Rules stipulates that "no person may market or undertake, by way of business, regulated Crypto Asset services within or from Bahrain, without obtaining a license from the CBB". Rule 1.1.6 of CRA Rules recognises the following activities as regulated activities that require a license from CBB:

  1. Reception and transmission of order14;
  2. Execution of orders on behalf of clients15;
  3. Dealing on own account16;
  4. Portfolio management17;
  5. Crypto-Asset custodian18;
  6. Investment advisory19; and
  7. Crypto-Asset exchange20.

Activities such as creating or administering Crypto-Assets, publishing or using software for the production or mining of Crypto-Assets and running a loyalty programme are not considered a regulated activity.

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14. Defined under CRA 1.1.6 as "the reception from a client of an order to buy and/or sell one or more accepted crypto-assets and the transmission of that order to a third party for execution."

15. Defined under CRA 1.1.6 as "acting to conclude agreements to buy and/or sell for one or more accepted crypto-assets on behalf of the clients."

16. Defined under CRA 1.1.6 as "trading against proprietary capital resulting in conclusion of transactions in one or more accepted crypto-assets."

17. Defined under CRA 1.1.6 as "managing or agreeing to manage accepted crypto-assets belonging to a client and the arrangement for their management are such that the licensee managing or agreeing to manage those accepted crypto-assets has a discretion to invest in one or more accepted crypto-assets."

18. Defined under CRA 1.1.6 as "safeguarding, storing, holding, maintaining custody of or arranging on behalf of clients for accepted crypto-assets."

19. Defined under CRA 1.1.6 as "giving, offering or agreeing to give, to persons in their capacity as investors or potential investors or as agent for an investors or potential investor, a personal recommendation in respect of one or more transactions relating to one or more accepted crypto-assets. A "personal recommendation" means a recommendation presented as suitable for the client to whom it is addressed, or which is based on a consideration of the circumstances of that person, and must constitute a recommendation to buy, sell, exchange, exercise or not to exercise any right conferred by a particular accepted crypto-asset, or hold a particular accepted crypto-asset. A recommendation is not a "personal recommendation" if it is issued exclusively through distribution channel or to the public".

20. Defined under CRA 1.1.6 as "crypto-asset exchange, licensed by the CBB and operating in or from the Kingdom of Bahrain, on which trading, conversion or exchange of: (i) accepted crypto-assets for fiat currency or vice versa; and/or (ii) accepted crypto-assets for another accepted crypto-asset, may be transacted in accordance with the Rules of the crypto-asset exchange."

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