Bahrain may not grab the Gulf’s fintech headlines, but it’s increasingly the market founders and banks choose when they need a proof-of-concept to mature into a product.
Economically, Bahrain is on firm footing: it grew by 2.5 per cent year on year in Q2 2025, with non-oil activity now roughly 85 per cent of output and financial services the largest single slice at about 17 per cent. Foreign direct investment stock rose 5.4 per cent to 17.5billion Bahraini dinars.
And yet it’s still under-credited. As Binance founder Changpeng Zhao (CZ) put it recently: “Bahrain doesn’t get the international recognition it deserves,” calling the Kingdom “one of the leading regulatory bodies in the whole space, but many people don’t know it”.
Part of Bahrain’s strength lies in how early it started building the right foundations. It launched the region’s first regulatory sandbox for fintech firms in June 2017. The Central Bank of Bahrain (CBB) followed with an open-banking rulebook in December 2018 that required banks to stand up real application-programming interfaces. In 2019, Rain became the Middle East’s first fully licensed crypto-asset platform.
It also appears to work because the pieces line up: a single, agile regulator – the CBB – sits at the centre, with Bahrain Economic Development Board (EDB) – the investment promotion agency – and Bahrain FinTech Bay (BFB) – the national hub – plugged in alongside banks and founders. Decisions move quickly and pilots are designed with an endgame: go live if they work.
Balancing act
H.E. Noor bint Ali Alkhulaif, Minister of Sustainable Development and chief executive of Bahrain EDB calls it “partnered” innovation: “when you’re faced with challenges, the best thing to do is to innovate… and in Bahrain it’s innovation that is partnered.”
A single, forward-looking regulator, the EDB to crowd in investment, and Bahrain FinTech Bay to convene pilots: “we are small, so we are able to deploy really quickly,” with policy stability and talent planning to match.
From the CBB side, Governor H.E. Khalid Humaidan is plain about the brief: “Digital is the key to successful financial services.”
The CBB’s single-regulator model helps it balance its dual mandate of growth and stability, and approvals stick to first principles – “compliance, governance, consumer protection and systemic risk” – because “when we focus on the most important risks, we can say yes to almost everything else.”
The line on integrity is just as direct: “only good money and good individuals are able to transact in our jurisdiction.”
On execution, Bahrain FinTech Bay’s CEO Bader Sater sums up why founders start here: “ease of access to the decision-makers and the responsiveness of the decision-makers,” plus a pragmatic stance where “there is no rule or regulation which cannot be changed if there is reason.”
Prove it locally, then expand: “we already consider Bahrain as a gateway to the GCC,” with first-adopter pilot, including with big tech, used to move new rails from trials into production.
Founder-friendly
The UK recently sent a 36-company fintech mission to test that promise against meetings with regulators, banks and investors in Bahrain.
As Katie Ramsey, head of fintech at the UK Department for Business & Trade, explained: “Firms that only started engaging a year ago are already signing MoUs and partnerships.
“The EDB, the CBB and Bahrain FinTech Bay… have been such enablers to attract and support UK fintechs in setting up here that we didn’t struggle to attract fintechs to join us.”
Sam Mudie, founder and CEO at Savea, which tokenises high-value physical assets and joined the recent trade UK mission, called Bahrain “very progressive and incredibly supportive of innovation in digital assets”.
He added: “It’s incredibly impressive how closely related the central bank regulator, the EDB, Bahrain FinTech Bay, and all the key players are. It’s almost as if they’re the same body. It seems like a really accessible marketplace.”
Barry O’Donohoe, co-founder and CEO at secure API access management company Raidiam, echoed that.
“We’ve been really impressed and blown away by the progressive policy environment… and regulatory frameworks; the central bank clearly being a civil authority for setting financial regulation helps.
He also highlighted the talent pipeline, “the priority around skills development”, as a pull factor for market entry.
In-market operator view
stc pay Bahrain, the Kingdom’s major digital wallet from Saudi Telecom Company (stc), also sets out why the market works as a proving ground.
CEO Metin Zavrak, says: “Bahrain is a strategic market with one of the region’s most advanced regulatory frameworks for fintech. Being licensed by the Central Bank of Bahrain provides our customers with full confidence in the safety, compliance, and reliability of our services.
“Bahrain is an ideal test market because of its size, diversity of population, and the agility of its regulator. The CBB has created a supportive ecosystem that allows fintechs to pilot, refine and scale solutions quickly.
“Having one central regulator is a significant advantage as it reduces complexity and ensures consistent oversight. At the same time, we monitor other markets like the UAE with VARA for digital assets, which offer opportunities for innovation in specialised sectors. This combination of strong local governance and awareness of regional frameworks positions us to expand thoughtfully and sustainably.”
Cross-border by design
Bahrain pitches itself as the Gulf testbed that scales: prove a product in a small, agile market with direct regulator access, then roll it across the GCC.
That path is being formalised. Jeel, Riyad Bank’s innovation arm, and Bahrain FinTech Bay signed an MoU linking Jeel’s Saudi sandbox with BFB’s sourcing network. “Move seamlessly from testing and validation into scalable, real-world deployment,” says Jeel CEO George Harrak. BFB COO Suzy Al Zeerah calls it a step to “drive startup growth, share critical market knowledge and foster innovation.”
There’s a Bahrain-Qatar bridge, too: BFB and the Qatar Financial Centre Authority agreed to share market intel, give visiting startups workspace access, co-run research and plug each other into events – lowering issues for dual-market launches.
Global partners are also getting in on the act. Ripple has a new strategic partnership with BFB to support proofs-of-concept and pilots in cross-border payments, digital assets, stablecoins and tokenisation – plus education and accelerator activity that seeds local capability.
Bahrain FinTech Bay has also partnered with MonetaGo to build a national Trade Finance Registry – real-time checks across lenders to catch duplicate financing and invoice fraud – aimed at unlocking SME credit and standing up the Kingdom’s first piece of digital public infrastructure.
Big-tech rails are in play as well: BFB recently coordinated a Google Cloud Universal Ledger pilot with BENEFIT, the national payments network, National Bank of Bahrain (NBB), Bahrain Islamic Bank (BisB) and Bank of Bahrain and Kuwait (BBK) that executed instant, tokenised BHD payments, including high-value transactions between corporates like Alba and Bapco Energies, laying groundwork to expand to more banks, currencies and cross-border use.
“We already consider Bahrain as a gateway to the GCC… we partner with entities to build the bridges founders need,” says BFB’s Sater.
The mechanics
Founders also point to the basics. Operating costs are lower than in regional hubs. Foreign ownership is straightforward. And Bahrain’s Tamkeen, the national Labour Fund, co-funds hiring, training and tech adoption – the unglamorous support that helps early teams localise without blowing the budget.
Bahrain isn’t the biggest market in the Gulf, and it won’t outspend its neighbours on incentives. The bar on compliance is deliberately high and founders still need regional partners to scale into Saudi or the UAE.
But for teams that arrive with a regulated use-case and a bank or corporate willing to test, Bahrain offers something rare: access, speed and a clear path from pilot to live.
