A central bank of a small Middle Eastern country has done something explicitly prohibited by U.S. legislation.

Written by: Plain Language Blockchain

The stablecoin market of 320 billion dollars is dominated by Tether and Circle, holding 90% of the share.

The EU wanted to leverage MiCA to breach the market, but Tether couldn't withstand the pressure and was collectively delisted by exchanges, exiting the market entirely.

In the context of the monopoly of U.S. dollar stablecoins and the EU being out of the picture, a license appeared that no one had anticipated.

In June 2026, the Central Bank of Bahrain issued the country's first stablecoin issuer license to AX Coin, a subsidiary of Nasdaq-listed Huaying Group (AXG). This license has a unique characteristic that neither USDT nor USDC possess: the holder can receive profits.

In July 2025, the U.S. President signed the Genius Act, which clearly stated: stablecoins are prohibited from paying interest to holders. In stark contrast, the Central Bank of Bahrain not only allows stablecoins to accrue interest but has designed this mechanism to align with Islamic law's profit-sharing model.

A central bank of a small Middle Eastern country has done something explicitly prohibited by U.S. legislation.

01 Why This License Is Valuable

There are many stablecoin licenses globally; the U.S. has state MTLs, the EU has MiCA, and Bermuda and the Cayman Islands can register as well. However, the licensing of AX Coin in Bahrain has three distinct layers.

The first layer is direct governance by a sovereign central bank. U.S. stablecoin regulation is still highly fragmented; issuers have to obtain licenses state by state and interface with multiple federal agencies, resulting in very high compliance costs. While the EU's MiCA has unified the framework, licensed service providers have only accounted for 7% to 8% in the past two years.

The approach of the Central Bank of Bahrain is straightforward and efficient: one regulatory authority, one set of rules, one license, onshore compliance. For traditional financial institutions, this certainty is more valuable than anything else.

The second layer is profit sharing. The income generated from AX Coin's reserve assets can be proportionally distributed to holders. This is not the virtual yields from DeFi liquidity mining but the actual profits derived from U.S. Treasury bonds and high-rated bank deposits.

The Central Bank of Bahrain legally defines it as "profit sharing" rather than "interest," circumventing various countries' regulatory definitions of interest-bearing securities.

The third layer is compliance with Islamic law. The global Islamic financial asset scale has approached 6 trillion dollars, but mainstream stablecoins have consistently been unable to penetrate this market due to the non-transparent interest model that violates the Riba prohibition in doctrine.

AX Coin's profit distribution mechanism strictly follows the risk-sharing principles in religious law, making it the world's first U.S. dollar stablecoin licensed by a central bank and certified under Islamic law.

In simple terms, AX Coin has obtained three passcards: "direct governance by the central bank, the ability to share profits, and no issues with religion." This combination cannot be found in any other global stablecoin.

02 Who Is Manipulating This Matter

The license is valuable, but it won't operate itself.

The team configuration of AX Coin itself is a strategic signal. Chairman Dr. Zhu Haokang has served as an Executive Director in Goldman Sachs' securities department and possesses extensive experience in digital assets and compliant financial product implementation. Dr. Zhu led the launch of Asia's first retail tokenized fund, which was approved as the first retail tokenized fund after the Hong Kong Securities Regulatory Commission issued a circular on "Tokenized Investment Products" in November 2023, signifying a significant milestone. This experience laid a crucial foundation for AX Coin in compliance stablecoin issuance, product design, and institutional operation.

CEO Xavier George has 25 years of experience in the payments industry, having worked at institutions such as American Express and Standard Chartered, and later served as the global stablecoin payments head for Yellow Card, bridging both traditional and crypto payment sectors.

The crypto and payments sectors are equally robust. The former head of Binance Bahrain operations is responsible for growth, and payment network head James Xia has 35 years of banking and payment experience, previously serving as a senior executive at Visa for the China region.

Notably, there is deep local integration. The compliance head is a former regulatory officer who worked at the Central Bank of Bahrain for 13 years. Non-executive director Yousif Alnefaiei is currently the Deputy CEO of BENEFIT, and core personnel from the partnership sit directly on the board, aligning interests. Another non-executive director, Dr. Lu Yongren, previously served as President of Citibank in the Hong Kong and Macau region.

People from traditional finance instill confidence in the institutions, those from the crypto space drive the product, and locals ensure that regulatory and payment channels truly connect. This amphibious configuration is uncommon in stablecoin projects.

03 From Bahrain to Africa: Where Should the Money Flow

Having a license and team is not enough; the key is whether the money can truly flow.

AX Coin's first binding node is the Bahrain National Payment Gateway, BENEFIT. This company is the core of electronic payments in Bahrain, connecting over 30 banks in the region, processing 494 million transactions in 2025, with nearly 100 billion dollars in fund circulation. The Deputy CEO of BENEFIT sits directly on the AX Coin board, marking a level of binding that goes beyond ordinary business contracts.

The second node is Gulf payment technology company Infinios. Both parties have reached a strategic partnership to implement compliant wallets, multi-currency virtual accounts, and fiat exchange channels, facilitating cross-border B2B settlement.

The third node is in Africa. AX Coin has connected with Yellow Card, the largest stablecoin payment platform in Africa, covering 20 African countries, with accumulated transaction volume nearing 6 billion dollars, and 99% of business driven by stablecoins. In the crypto transactions in sub-Saharan Africa, stablecoins account for as much as 43%. This is not a "future market," but a reality where stablecoins are already being used as a substitute for the U.S. dollar.

The Middle East is obtaining licenses and building channels, while Africa is capturing incremental growth. A stablecoin corridor from the Gulf to Africa is beginning to take shape.

04 But Can This Work?

We must acknowledge the gap. USDT and USDC together account for 90% of the 320 billion dollar stablecoin market, while AX Coin's first-year target is 500 million dollars. Although it can rank among the top seven fiat stablecoins, it is still less than a fraction of USDT.

The profit-sharing model also faces limitations. The profit-sharing relies on the yield of U.S. Treasury bonds; if the Federal Reserve significantly lowers interest rates, the attractiveness will diminish. From strategic cooperation to the actual functioning of payment channels, there are still technical integrations and regulatory adaptations to navigate.

However, AX Coin's approach is not about taking a bite from USDT.

With a nearly 6 trillion dollar Islamic finance market, there is still virtually no compliant entry point for digital assets. Even if it penetrates just 0.5%, that amounts to a scale of 30 billion dollars. This door cannot be entered by USDT and USDC; it's not that they don't want to, but their product structure prevents them from passing the religious law certification.

What AX Coin aims to open is a door to which others have no key.

When the U.S. wrote "prohibiting stablecoin interest payments" into federal law, Bahrain had already issued a license that allows interest payments.

The next incremental growth in global stablecoins may not be found in Silicon Valley.