Bahrain leads the Middle East stablecoin race, but where are the coins?

Solowin Holdings has a stablecoin issuer licence, a seat in Hong Kong's tokenized deposit pilot and no stablecoin.

Bahrain's central bank granted the licence on June 3, the first under that country's framework.

Three months on, no coin has been issued, and the company has not said publicly when one will be. Nor has either Hong Kong licensee, five months after being approved.

Thomas Zhu, a Solowin director and chief executive of its AlloyX subsidiary, put the Gulf choice down to demand rather than to difficulty elsewhere: the Middle East "holds substantial sovereign capital and treasury-management demand," he told Invezz in written answers to questions, and "this underpins our footprint in Dubai and Bahrain."

What the growth is made of

Revenue for the year to March 31 was $28.05 million, up 895% from a base of roughly $3 million.

About $22.2 million of it, or 79%, was AI infrastructure: cloud compute sold to enterprise customers, not stablecoins and not tokenization.

The company's own investor deck puts total value tokenised at $52 million, against $848.8 million of assets under administration and $1.04 billion of stablecoin and fiat trading volume.

It also discloses that a small number of clients account for a substantial share of revenue. Zhu presents the AI side as deliberate rather than incidental: the company will "not train general-purpose large language models," he said, but supply "the compliant capital layer, token layer and governance layer that enable AI to conduct actual financial transactions."

Operating expenses were $40.14 million, on AI cloud bills, headcount, research and share-based pay, for a net loss of $13.29 million.

The company ended the year with $16.8 million of cash and equivalents, up from $3.84 million.

AXG closed on Tuesday at $2.22, near the low of a 52-week range running to $4.83, for a market capitalisation of about $429 million.

Institutional demand across the sector remains early. "Flows on chain are really thin," Nic Roberts-Huntley, chief executive of Blueprint Finance, said on the On The Margin podcast.

"I think what we've asked a lot of like institutional finance people who sit in their traditional roles and have very, very fixed practices is to say, you must change fundamentally what you do to get exposure to something that is just a fraction of the size of what you have. That doesn't make any sense whatsoever."

The licence and the pilot seat

Solowin's Hong Kong link is not the stablecoin regime but the tokenization one.

Solomon JFZ, its crypto-enabled brokerage, is listed in the HKMA's own annex of participants in EnsembleTX, the pilot running real-value tokenized money market fund trades through 2026 alongside Standard Chartered, HSBC, Bank of China (Hong Kong), BlackRock and Franklin Templeton.

"We are honored that our Hong Kong-based crypto-enabled brokerage, Solomon JFZ, has been selected to participate in EnsembleTX," Zhu said when it was named.

Hong Kong's stablecoin register is a separate matter, and a closed one.

It has carried the same two names since April 10: HSBC and Anchorpoint Financial, a joint venture of Standard Chartered Bank (Hong Kong), HKT and Animoca Brands, both flagged as front-runners in March.

Thirty-six firms applied. The government told legislators in June that "the licensing threshold will remain high" and that "the overall number of licences will remain very limited."

Neither Hong Kong licensee has shipped either. HSBC's Hong Kong dollar coin is due in the second half of 2026, routed through PayMe and its mobile banking app, a base of 3.3 million users on day one.

Strong tokenization or weak

The distinction that decides what any of this is worth is what a token actually conveys.

"You own the token and the token is the asset, you own the asset. It's different. It's what we call title tokenization," Chris Turner, co-founder of the impact investment platform Kula, said on the On The Margin podcast.

Most of the market does something weaker: "It's giving a contractual exposure to the economic upside of that particular asset. But you don't own the asset."

Asked where the business is heading, Zhu described the strong version for Solowin's platform, FERION, an offering that lets institutions issue tokenized assets "in a compliant manner and bridge on-chain transactions with off-chain legal recognition and redemption."

He named the binding constraints as "cross-jurisdictional legal affirmation, custody and regulatory compliance," which is a description of the same problem.

Solowin does not break out the legal structure behind the $52 million tokenised figure, and is not required to.

The nearest comparable is measurable. Libeara, the Standard Chartered-backed Singapore platform Solowin backed in April, now runs the eighth-largest book of tokenized US Treasury funds at $695.3 million, according to rwa.xyz.

The whole tokenized Treasury market is $15.87 billion and shrank 1.6% last month.

Licences are being rationed, vendors are numerous, and the money that would pay for either has not arrived in sufficient amounts.