Bahrain Crypto License – 2026 Guide
The Kingdom of Bahrain has solidified its position as the premier regulatory hub for digital assets in the Middle East. Under the sophisticated oversight of the Central Bank of Bahrain (CBB), the nation offers a “gold standard” crypto-asset framework that balances innovation with rigorous financial security.
Since 2019, Bahrain’s regulations for cryptocurrency businesses have evolved significantly, establishing the country as a pioneer in the Middle East for cryptocurrency and blockchain regulations.
For Crypto-Asset Service Providers (CASPs) looking to capture the burgeoning MENA market, Bahrain offers unique advantages such as advanced regulatory frameworks, a supportive ecosystem for fintech and blockchain startups, and licensing support. The Bahraini crypto license – governed by the Crypto-Asset (CRA) Module – represents a prestigious entry point that provides access to institutional investors and a stable, high-tech financial ecosystem.
Quick Facts: Bahrain Crypto Licensing
| Feature | Details |
| Regulatory Authority | Central Bank of Bahrain (CBB) |
| Primary Legislation | CBB Rulebook Volume 6 (Capital Markets), CRA Module |
| License Categories | 4 Categories (Advisory, Brokerage, Principal Trading, Exchange) |
| Minimum Paid-up Capital | BHD 25,000 to BHD 300,000 (Approx. $66,000 – $795,000) |
| Corporate Tax Rate | 0% |
| Timeline | 3 to 6 months |
Bahrain’s strategic position within the Gulf Cooperation Council (GCC) gives crypto businesses access to regional markets and aligns its regulatory standards with those of the broader Gulf region.
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Crypto license in Bahrain
The licensing regime is issued and supervised by the Central Bank of Bahrain (CBB) under the authority of Decree No. 64 of 2006 (the CBB Law). The specific rules for digital assets are contained within Volume 6 (Capital Markets) of the CBB Rulebook, specifically the Crypto-Asset (CRA) Module, which serves as a central part of Bahrain’s regulatory framework for crypto assets.
To obtain a crypto license in Bahrain, applicants must meet strict approval requirements, demonstrating regulatory compliance with the CBB’s standards and procedures. This includes preparing a comprehensive set of documents and policies as part of the application process.
The regulatory framework in Bahrain covers licensing, governance, minimum capital, risk management, AML/CFT, conflicts of interest, business conduct, safeguarding clients’ money, and cybersecurity for crypto-asset services.
The Bahraini license is not a “one size fits all” permit. It is strategically divided into licensing categories, each dictating the scope of regulated crypto asset services that a business can provide. These categories ensure you only pay for and comply with the regulations relevant to your business:
- Category 1 (Advisory/Brokerage): Reception and transmission of orders, providing investment advice;
- Category 2 (Custodian/Agent): Trading as an agent, portfolio management, and full crypto-asset custody services;
- Category 3 (Principal Trading): All Category 2 activities plus trading as principal (dealing on own account/Market Making);
- Category 4 (Crypto-Asset Exchange): Operating a licensed exchange platform and providing custody.
The Central Bank of Bahrain (CBB) evaluates the business model and proposed services of applicants to determine the appropriate licensing category for the cryptocurrency license. The laws and regulations related to virtual assets in Bahrain apply to any individual or entity that engages in the business of virtual asset services, including trading, dealing, advisory, or portfolio management services.
- Premier Reputation: Unlike “offshore” jurisdictions, Bahrain is a Tier-1 financial hub. A CBB license is recognised by global banks, making it significantly easier to secure fiat on/off-ramps;
- Strategic Market Reach: Bahrain serves as the “Gateway to the Gulf.” A presence here provides proximity to the high-net-worth markets of Saudi Arabia, Kuwait, and the UAE. Bahrain also has strong bilateral economic ties with the UAE, Saudi Arabia, and Qatar, making it an ideal launchpad for crypto firms;
- Tax Efficiency: Currently, Bahrain maintains a 0% Corporate Income Tax environment. While a 10% tax for large local companies is planned for 2027, the current landscape remains one of the most competitive in the world for startups. Bahrain does not impose income or capital gains tax, making it financially attractive for crypto businesses;
- Access to Fast-Growing Digital Asset Market: Bahrain provides access to a fast-growing market for virtual currencies and digital assets, opening numerous investment opportunities;
- Supportive Innovation Ecosystem: Bahrain FinTech Bay serves as a central hub for fintech and blockchain startups, offering physical workspace, mentorship, and access to regional investors;
- Robust Legal Framework: The CBB’s rules are clear, transparent, and based on international best practices. This provides founders with legal certainty that their business model won’t be disrupted by sudden, arbitrary changes.
To qualify for a license, the CBB requires a high level of operational integrity and local substance. Applicants must meet specific business obligations, including regulatory and compliance requirements, and are required to initiate business operations within a specified timeframe after receiving the license.
The CBB also mandates adherence to technology standards as part of the licensing process and ongoing compliance, ensuring that virtual asset service providers follow international best practices for operational security.
Additionally, the CBB has implemented a comprehensive set of ongoing requirements for CASPs to ensure compliance, including technology and cybersecurity mandates.
1. Corporate Entity
The applicant must establish a legal entity in Bahrain before commencing the licensing procedure. Under CRA-2.1.1, applicants for Category 1, 2, and 3 licenses may incorporate as a Bahraini company with limited liability (W.L.L.) OR a Bahraini Joint Stock Company (B.S.C.). Only Category 4 licensees (Exchanges) are strictly required to be a Bahraini Joint Stock Company (B.S.C.)
2. Share Capital (Minimum Paid-in)
Capital must be deposited in a Bahraini bank and maintained at all times:
- Category 1: BHD 25,000;
- Category 2: BHD 100,000;
- Category 3: BHD 200,000;
- Category 4: BHD 300,000.
3. Local Presence (Substance)
Bahrain strictly enforces “Mind and Management” requirements. You must have:
- A physical office in Bahrain (not a virtual office);
- Local IT infrastructure or secured cloud nodes accessible to the regulator;
- Controlled Functions: Personnel must reside in Bahrain, including the CEO, Compliance Officer, Money Laundering Reporting Officer (MLRO), Chief Information Security Officer (CISO), Head of Finance, Head of Risk Management, and Head of Operations.
4. Fit-and-Proper Documentation
All Approved Persons (directors and senior management) must undergo a rigorous fit-and-proper test. This includes:
- Clean criminal records (police clearance);
- Proof of relevant experience in finance/technology;
- A 3-year detailed business plan;
- Comprehensive AML/KYC and Cybersecurity policies.
5. Other Requirements
- Professional Indemnity Insurance: Minimum coverage requirements apply (often starting at BHD 100,000);
- External Audit: You must appoint an independent auditor approved by the CBB.
LegalBison strives to make the crypto licensing process in Bahrain as transparent and simple as possible for every entrepreneur. Navigating the complex regulatory requirements can feel like an uphill battle, but our team specialises in bridging the gap between your vision and the CBB’s standards.
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Crypto license in Bahrain: Cost of Set-Up
Whether you want to license an existing company as a CASP or build a legal entity from scratch, we recommend starting with a thorough assessment of your options. LegalBison provides a free primary consultation with a lawyer for all kinds of businesses seeking CASP authorization. Get in touch with us today and have our in-house lawyers study your case and provide a personalized roadmap.
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Receive detailed guidance on the Bahrain cryptocurrency license.
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Initial Consultation with a cryptocurrency licensing expert
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MiCA Compliance Assessment
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MiCA Operational Assessment
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CASP Licence Class Assessment
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Application Preparation
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Interaction with the NCA
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Company Formation
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Corporate Services for 1 year
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Bank Account Opening Assistance
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Legal Web3 Documents Package
Full turnkey crypto company formation and support in all necessary aspects.
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Initial Consultation
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Turnkey Company Formation
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Registration as CASP with the Regulator
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Licence Class Assessment
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Application Preparation
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Basic (mandatory) AML/KYC Policy
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Full communication with the license issuing authority for obtainment of authorization
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Translated and apostilled set of corporate documents
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Assistance in opening Business account for crypto operating activity
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Assistance in formulating requirements, finding, interviewing and written agreement with AML/MLRO for your crypto company
Crypto license in Bahrain — How to Apply
Navigating the path to a crypto-asset license in Bahrain is a structured journey designed to ensure your business meets the Kingdom’s elite financial standards. By following this clear roadmap devised by LegalBison experts, your firm can move efficiently from preparation to final issuance with total legal certainty.
Preparation & Company Formation
In this initial phase, we assist in selecting the correct license category and incorporating the local entity. We gather all primary documents from shareholders (UBOs) and directors.
Application Submission
We prepare the comprehensive “Form 1” application along with the Business Plan, AML manuals, and Technology Risk assessments. The application fee is paid to the CBB at this stage.
Regulatory Review & Interviews
The CBB reviews the submission. This is an interactive stage where the regulator may request “further information” or invite the management team for an interview (virtual or in-person).
License Issuance
Once the IPA (the CBB’s conditional approval notification) is granted within 60 calendar days of completing the application, the applicant must fulfil any remaining conditions (e.g., final capital deposit, hiring the MLRO, final office inspection).
Need assistance from a crypto licensing expert?
Our lawyers are available for a personalized free consultation. If you have any questions about crypto licensing in the Kingdom of Bahrain, no matter what they are, feel free to leave your request on this page or call us right away. Our in-house lawyers will study your case and provide you with the best solution for licensing your crypto company in Bahrain.
Costs and Fees
The financial commitment required to secure a Bahraini crypto license is primarily defined by the minimum paid-up capital requirements established by the Central Bank. These requirements are tiered based on the complexity and risk profile of the services offered.
- For entities seeking a Category 1 license, which focuses on advisory and brokerage services, the minimum capital is set at BHD 25,000;
- Companies providing custody services or acting as agents under a Category 2 license must maintain a capital base of BHD 100,000;
- Those engaged in principal trading and dealing on their own account under Category 3 require BHD 200,000, while the most comprehensive license, Category 4 for crypto-asset exchange operators, mandates a minimum paid-up capital of BHD 300,000.
This capital must be deposited into a local Bahraini bank account and maintained throughout the life of the license to ensure the firm’s financial stability and operational integrity.
Post-Licensing Compliance
Ongoing regulatory compliance is the cornerstone of maintaining a Bahraini crypto license. The Central Bank of Bahrain (CBB) requires licensed crypto companies to adhere to a robust regulatory framework that emphasises consumer protection and the safeguarding of customer interests. This framework includes measures to ensure transparency, protect client assets, and manage cybersecurity risks.
- Reporting: Quarterly and annual financial reports must be submitted to the CBB;
- AML/CFT: Continuous transaction monitoring, annual general audits by a third party, and an external audit of client assets (compliance with holding and segregation rules) every 6 months;
- Cybersecurity: CASPs must implement cybersecurity controls such as multi-factor authentication, encryption, secure storage, and incident response plans to comply with regulations. Penetration testing is also mandatory at least twice a year (every 6 months);
- Renewal: While the license is generally “perpetual,” the annual fee must be paid, and the firm must remain in good standing with the CBB.
Common Misconceptions
- “It takes 1 week to get licensed”. Some competitors claim rapid approval. This is false. The CBB is a high-level regulator; the process takes several months to ensure systemic stability;
- “No local staff are needed”. This is a critical error. The CBB requires “Mind and Management” to be in Bahrain. You cannot run a CBB-licensed firm entirely from abroad;
- “Bahrain is just an offshore tax haven”. Bahrain is an onshore, highly regulated jurisdiction. Its 0% tax (for now) is a benefit of its economic policy, not a lack of oversight.
- Bahrain Crypto License
Costs and Fees
The financial commitment required to secure a Bahraini crypto license is primarily defined by the minimum paid-up capital requirements established by the Central Bank. These requirements are tiered based on the complexity and risk profile of the services offered.
- For entities seeking a Category 1 license, which focuses on advisory and brokerage services, the minimum capital is set at BHD 25,000;
- Companies providing custody services or acting as agents under a Category 2 license must maintain a capital base of BHD 100,000;
- Those engaged in principal trading and dealing on their own account under Category 3 require BHD 200,000, while the most comprehensive license, Category 4 for crypto-asset exchange operators, mandates a minimum paid-up capital of BHD 300,000.
This capital must be deposited into a local Bahraini bank account and maintained throughout the life of the license to ensure the firm’s financial stability and operational integrity.
Post-Licensing Compliance
Ongoing regulatory compliance is the cornerstone of maintaining a Bahraini crypto license. The Central Bank of Bahrain (CBB) requires licensed crypto companies to adhere to a robust regulatory framework that emphasises consumer protection and the safeguarding of customer interests. This framework includes measures to ensure transparency, protect client assets, and manage cybersecurity risks.
- Reporting: Quarterly and annual financial reports must be submitted to the CBB;
- AML/CFT: Continuous transaction monitoring, annual general audits by a third party, and an external audit of client assets (compliance with holding and segregation rules) every 6 months;
- Cybersecurity: CASPs must implement cybersecurity controls such as multi-factor authentication, encryption, secure storage, and incident response plans to comply with regulations. Penetration testing is also mandatory at least twice a year (every 6 months);
- Renewal: While the license is generally “perpetual,” the annual fee must be paid, and the firm must remain in good standing with the CBB.
Common Misconceptions
- “It takes 1 week to get licensed”. Some competitors claim rapid approval. This is false. The CBB is a high-level regulator; the process takes several months to ensure systemic stability;
- “No local staff are needed”. This is a critical error. The CBB requires “Mind and Management” to be in Bahrain. You cannot run a CBB-licensed firm entirely from abroad;
- “Bahrain is just an offshore tax haven”. Bahrain is an onshore, highly regulated jurisdiction. Its 0% tax (for now) is a benefit of its economic policy, not a lack of oversight.
Alternatives to a crypto license in Bahrain
Other notable jurisdictions outside for crypto licensing may be worth your consideration.
Crypto License in Australia
on request-
Reputed jurisdiction
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Straightforward requirements
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Simple to operate
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Top economy
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Secure and trusted
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Compoundable license
Crypto License in El Salvador
on request-
Bitcoin is legal tender
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Pro-crypto regulations
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High reputation
Crypto License in Switzerland
on request-
8.5% CIT
-
Flexible framework
-
Financial prestige
Crypto License in Liechtenstein
on request-
12,5% CIT
-
Flexible framework
-
Highly trusted
About the Crypto License in Bahrain
A CASP license is a mandatory authorisation from the Central Bank of Bahrain (CBB) required for any entity wishing to market or undertake regulated crypto-asset services within or from Bahrain for commercial gain. These regulated services include receiving and transmitting orders, trading as an agent or principal, portfolio management, custody, investment advice, and operating a crypto-asset exchange.
Applicants should first schedule a pre-application meeting with the CBB’s Licensing Directorate to discuss their business model, followed by the submission of a formal application (Form 1) accompanied by a non-refundable BD 100 fee. The application must include comprehensive supporting documentation such as a business plan, risk assessments, financial projections, and forms for shareholders and management.
The CBB offers four license categories based on permissible activities: Category 1 is for investment advice and order reception without holding client assets, while Category 2 adds trading as an agent, custody, and portfolio management with the ability to hold assets. Category 3 allows for trading as a principal in addition to Category 2 activities, and Category 4 is specifically for operating a licensed crypto-asset exchange and custody services.
The minimum paid-up share capital requirements vary by license category: BD 25,000 for Category 1, BD 100,000 for Category 2, BD 200,000 for Category 3, and BD 300,000 for Category 4. Additionally, licensees must maintain sufficient liquid assets to cover at least three months of estimated operating expenses.
Cryptocurrency services are legal and regulated in Bahrain under the oversight of the Central Bank of Bahrain (CBB), which issues licenses for regulated crypto-asset services to ensure market integrity and minimise financial crime risk. However, licensees are required to disclose to clients that crypto-assets are not legal tender and are not backed by the government.
The first step to get a crypto license in Bahrain is to work with a reliable legal partner
Navigating the Central Bank of Bahrain’s requirements requires a partner who understands the local regulatory intricacies. LegalBison has helped numerous clients traverse the path from initial concept to a fully licensed Category 4 exchange. We provide the expertise needed to satisfy the CBB’s high standards for cybersecurity, AML, and corporate governance.
Ready to start your journey in the Kingdom of Bahrain?
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Legal experts in designing solutions for crypto licensing worldwide.
Corporate finance specialist and expert about FinTech regulations worldwide.