Digital Payments & Fintech · Bahrain
Fintech & payments regulation in Bahrain (2026)
Bahrain shaded by its digital payments & fintech status
Fintech and digital payments in Bahrain: licensing regime.
FrameworkCentral Bank of Bahrain (CBB) under the CBB and Financial Institutions Law 2006 (Decree No. 64 of 2006); payments/e-money and open banking are regulated primarily through CBB Rulebook Volume 5 (Ancillary Service Providers), including Module AU (Authorisation) and Module OB (Open Banking); crypto-asset services are regulated under Volume 6 Module CRA.
Bahrain operates a mature, dedicated licensing regime for digital payments and fintech administered by the Central Bank of Bahrain, with distinct authorisation categories for Payment Service Providers (PSPs), e-money issuers, Account Information Service Providers (AISPs) and Payment Initiation Service Providers (PISPs). It was the first MENA jurisdiction to mandate open banking (2018) and to launch a formal fintech regulatory sandbox (2017), and it operates a national instant-payment rail (Fawri+) via BENEFIT. Amendments in May 2026 tightened capital, governance and operational-resilience requirements for PSPs, while a BNPL-specific module remains in the consultation/finalisation phase following a 2025 consultation.
Key points
PSPs and e-money issuers are licensed by the CBB under Volume 5 of the Rulebook (Ancillary Service Providers), Module AU, pursuant to Article 40 of the CBB Law which prohibits provision of Regulated Services without a CBB licence. May 2026 amendments to Volumes 3 and 4 updated authorisation, capital, governance and operational-resilience conditions for PSPs, AISPs and PISPs.
The CBB mandated open banking for all retail banks in December 2018 and formalised the Bahrain Open Banking Framework (BOBF) in October 2020, with a second phase in September 2021. The dedicated Module OB in Volume 5 governs AISP/PISP conduct, strong customer authentication, API specifications, security standards and customer-journey guidelines.
Bahrain operates a national instant-payment system through BENEFIT Company; Fawri+ provides 24/7 real-time credit transfers (up to BHD 1,000 per account per day) and Fawri handles same-business-day domestic transfers, underpinning BenefitPay's mobile wallet ecosystem.
The CBB launched a formal fintech regulatory sandbox in 2017 (one of the first in the MENA region), offering a nine-month testing window (extendable by three months) open to CBB licensees and local/foreign firms whose solutions demonstrate innovation, customer benefit and intent to deploy in Bahrain.
BNPL is currently captured only indirectly through February 2022 amendments to Volume 5 covering innovative short-term consumer-finance models. The CBB closed a consultation in late 2025 on a dedicated BNPL module that would treat BNPL as regulated short-term credit with capital, conduct, consumer-protection, disclosure, complaints-handling and digital-security requirements; the final module is under review.
Crypto-asset services (custody, trading, brokerage, portfolio management, advisory) require a CBB licence under Volume 6, Module CRA, first issued February 2019 and expanded in March 2023 to include Digital Token Offerings with security-like characteristics. The module covers licensing categories, minimum capital, governance, AML/CFT, safeguarding and cybersecurity.
Timeline - major decisions & events
The Central Bank of Bahrain introduced the Stablecoin Issuance and Offering (SIO) Module in Volume 6 of its Rulebook, establishing licensing, reserve, governance and redemption rules for fiat-referenced (BHD, USD or other approved currency) stablecoin issuers. It is the Gulf's first comprehensive stablecoin regime.
Central Bank of Bahrain ↗A CBB circular made new Open Banking obligations effective, requiring consent and authentication, licensee disclosures and API performance reporting, and extending account-information and payment-initiation services to corporate/institutional customers rather than just individuals.
The Paypers ↗The CBB amended its Crypto-Asset (CRA) Module to regulate digital token offerings, introducing definitions for asset/utility tokens, a mandatory whitepaper template and enhanced cyber-security rules, and clarifying when tokens are treated as securities.
Central Bank of Bahrain ↗The CBB launched the comprehensive Bahrain Open Banking Framework (operational guidelines, security and customer-experience standards, technical API specifications and governance), making Bahrain the first MENA jurisdiction to mandate technical open-banking standards.
Central Bank of Bahrain ↗The CBB published final rules requiring anyone offering crypto-asset services or operating crypto-asset exchanges within or from Bahrain to be licensed, covering minimum capital, governance, AML/CFT, custody, market-conduct and cyber-security standards.
Central Bank of Bahrain ↗The CBB added Open Banking rules to Volume 5 (Ancillary Service Providers), establishing licensing for account-information service providers (AISPs) and payment-initiation service providers (PISPs), the regulatory foundation for the later open-banking framework.
CBB Rulebook (Thomson Reuters) ↗The CBB introduced a regulatory sandbox letting licensed and unlicensed fintech firms test technology-based solutions for up to a year under supervision, a foundational mechanism for licensing new payment and fintech business models in Bahrain.
Central Bank of Bahrain ↗Decree No. 64 of 2006 promulgated the CBB Law, creating the Central Bank of Bahrain as the single integrated regulator of the financial sector, the statutory basis for all licensing of banks, payment service providers, money transmitters and fintech firms.
Central Bank of Bahrain ↗Bahrain - other topics
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