Key Takeaways:
Bank of Bahrain and Kuwait will explore regulated stablecoin infrastructure with AX Coin, targeting institutional payments and cross-border settlement.
SOLOWIN HOLDINGS' regulated stablecoin issuer AX Coin Bahrain signed a non-binding memorandum of understanding with Bank of Bahrain and Kuwait to develop stablecoin infrastructure for institutional payments, treasury operations and cross-border settlement, the companies said Monday.
"This partnership marks a significant milestone in the evolution of regulated digital finance, particularly as the global banking sector moves toward new models that leverage the potential of stablecoins to enhance institutional payments and financial services," Xavier George, managing director of AlloyX Limited and CEO of AX Coin, said.
Under the MOU, BBK and AX Coin will assess use cases across institutional payments, remittances and cross-border settlement, combining BBK's banking expertise with AX Coin's licensed digital asset infrastructure. Stablecoins — digital tokens typically pegged one-to-one to a fiat currency and backed by reserve assets — offer faster settlement times and lower transaction costs compared with traditional correspondent banking networks that can take days to clear cross-border payments.
Projections suggest as much as $1 trillion could shift from emerging market bank deposits into stablecoins by 2028, reflecting growing institutional interest. The partnership reinforces Bahrain's position as a hub for financial innovation connecting traditional banking with regulated blockchain technology.
A Regulated Approach to Stablecoin Banking
The collaboration pairs one of Bahrain's oldest financial institutions — BBK was established in 1971 — with a licensed digital asset issuer operating under the kingdom's regulatory framework. AX Coin is the regulated stablecoin arm of SOLOWIN HOLDINGS (Nasdaq: AXG), a fintech firm founded in 2016 that operates a dual-token digital economy platform spanning stablecoin issuance, asset tokenization, securities trading and AI-powered services.
Adnan Al Ameer, head of financial institutions group within wholesale banking at BBK, said the bank continues to explore emerging financial technologies within clear regulatory frameworks. "This collaboration with AX Coin will allow us to assess how regulated stablecoins can support new institutional banking models by improving transaction speed, liquidity efficiency and cross-border financial operations," he said.
Bahrain's central bank has established a licensing framework for crypto asset services that requires stablecoin issuers to maintain full reserve backing and comply with anti-money laundering standards. This regulatory clarity has positioned the kingdom as a testing ground for institutional-grade digital asset products in the Gulf region, distinguishing it from jurisdictions with less defined rules.
Institutional Demand Drives Stablecoin Expansion
The MOU arrives as stablecoins attract growing attention from traditional financial institutions seeking alternatives to legacy payment rails. The projected $1 trillion migration from emerging market deposits highlights the scale of potential demand for compliant stablecoin solutions that can operate within existing banking regulations.
For AXG, the partnership extends its footprint in the Gulf region's digital asset ecosystem. The company's broader platform includes products spanning AX COIN, AX ONE, FERION, SOLOMON, AGENTX and KOVAR, serving institutional clients across digital asset tokens and AI tokens.
This article is for informational purposes only and does not constitute investment advice.
