the Central Bank of Bahrain granted the country’s first stablecoin issuer license to AXG, a Nasdaq-listed company. The core significance of this license lies in its integration of three major elements: sovereign central bank supervision, a profit-sharing mechanism, and Sharia compliance. This combination represents a competitive advantage that mainstream stablecoins such as USDT, USDC, and PYUSD have yet to achieve.

The issuance of this license marks the emergence of a new stablecoin development path in the Middle East, one that differs clearly from the U.S. and European models. Its underlying logic is rooted in the region’s unique economic pain points and distinctive religious-financial requirements. Based on publicly available information and authoritative industry data, this article provides a comprehensive analysis of AXG’s stablecoin opportunity across four dimensions: market logic, regulatory design, ecosystem implementation, and commercial value. It also examines the central bank licensing path that mainstream stablecoins have not yet been able to follow, as well as the real growth logic and limitations behind it.

I. The Uniqueness of AXG’s U.S. Dollar Stablecoin

The first stablecoin issuer license granted by the Central Bank of Bahrain to AXG demonstrates clear structural differences from mainstream U.S. and European stablecoins in terms of regulatory rules and institutional design. Its uniqueness is mainly reflected in three core dimensions.

Direct Supervision by a Sovereign Central Bank, Strengthening Compliance Certainty in a Single Jurisdiction

The U.S. stablecoin industry has long faced the challenge of regulatory fragmentation. Issuers must navigate a complex combination of state-level licenses and the separate regulatory framework of the New York Department of Financial Services, resulting in high compliance costs. Although the GENIUS Act proposes a more unified regulatory framework, it remains in the implementation stage and has not yet been fully enacted.

In the European Union, MiCA has formally introduced a unified regulatory framework for crypto assets. However, its implementation has been slow. Over the past two years, licensed compliant service providers in Europe have accounted for only 7% to 8% of the market, while most traditional financial institutions have yet to complete system adaptation and regulatory transformation. Tether, the world’s largest stablecoin issuer with a recent valuation of $375 billion, was also forced to exit the European market after failing to obtain a European central bank license.

Unlike the fragmented and slower-moving regulatory models in the U.S. and Europe, the Central Bank of Bahrain has placed AX Coin directly under its central bank supervisory framework. This allows AX Coin to possess full onshore compliance qualifications and regulatory certainty from the outset.

This institutional arrangement had already been clearly established in the Stablecoin Issuance and Offering Module issued by the Central Bank of Bahrain in July 2025. The rules require all stablecoin issuers to obtain official authorization, strictly peg their stablecoins to the U.S. dollar, Bahraini dinar, or other approved fiat currencies, and ensure that each stablecoin is fully backed 1:1 by highly liquid, low-risk, and high-quality reserve assets.

This strict and clearly defined regulatory framework naturally creates a high industry entry barrier and is well suited to the compliance requirements of conservative financial capital, including commercial banks and sovereign wealth funds.

An Innovative Profit-Sharing Mechanism That Breaks Through the U.S. and European “No-Yield” Constraint

U.S. and European regulatory systems impose strict restrictions on yield-bearing stablecoins. The recent stablecoin legislation advanced by the U.S. Senate Banking Committee explicitly prohibits stablecoins from paying passive interest to holders, and bipartisan compromise provisions further reinforce this restriction.

By contrast, Bahrain’s regulatory framework explicitly recognizes a compliant model for yield-generating stablecoins. It allows issuers to distribute returns generated from reserve assets, such as cash and short-term government bonds, to token holders. Within the framework of Islamic finance, this mechanism is legally defined as “profit sharing” rather than traditional interest income, which is prohibited under Sharia principles.

Put simply, AX Coin has obtained three passes at once: direct central bank supervision, profit-sharing capability, and religious legitimacy. This combination does not currently exist elsewhere in the global stablecoin market.

Sharia Compliance, Opening Access to the $5 Trillion Islamic Finance Market

Global Islamic finance assets have exceeded $5 trillion, yet their penetration into the digital asset sector has remained close to zero for a long time. Mainstream stablecoins generally do not meet the core requirements of Islamic finance. They may conflict with the prohibition of interest, known as Riba, and often fail to satisfy the principles of real asset backing and risk sharing.

Through its dedicated license, AX Coin has completed Sharia compliance certification. Its reserve asset structure strictly follows the principle of risk sharing, creating a compliant and efficient direct channel for traditional Islamic financial capital to access the on-chain U.S. dollar ecosystem.

II. AXG Stablecoin’s Core Market Advantages in the Middle East

Traditional financial infrastructure in the Middle East has clear limitations. Banking services are often interrupted, and the SWIFT global payment system can become unreliable during weekends or periods of political volatility. Stablecoins, by contrast, operate 24/7 and can serve as a digital dollar equivalent, becoming a strategic reserve and payment instrument for the Middle Eastern market.

The global cross-border payments market exceeds $250 trillion. However, many small and medium-sized enterprises in the Gulf region remain constrained by barriers within the traditional banking settlement system. By packaging the liquidity of U.S. Treasuries into digital assets, U.S. dollar stablecoins can reconstruct the global circulation and distribution channels of dollar liquidity. Combined with the urgent need of Islamic financial capital for compliant digital asset access, the potential value of the Middle Eastern stablecoin market is further amplified.