Bahrain vs Luxembourg
Crypto regulation comparison
Bahrain
Luxembourg
Legal
Legal
Bahrain is one of the most crypto-friendly jurisdictions in the Middle East. The Central Bank of Bahrain introduced a comprehensive crypto-asset regulatory framework in 2019, and there is no personal income or capital gains tax. Several major exchanges including Binance have obtained licenses.
Luxembourg is a major European hub for crypto and blockchain financial services. The CSSF regulates VASPs and crypto-related investment funds. Crypto held for more than 6 months is generally exempt from capital gains tax for individuals, making it attractive for long-term holders. Luxembourg hosts several prominent crypto exchanges and fund administrators.
Tax Type
No tax
Tax Type
Capital gains
Tax Rate
0%
Tax Rate
0-42%
Exchanges
Yes
Exchanges
Yes
Mining
Yes
Mining
Yes
Regulator
CBB (Central Bank of Bahrain)
Regulator
CSSF (Commission de Surveillance du Secteur Financier)
Stablecoin Rules
Regulated under CBB crypto-asset module; stablecoin issuance requires CBB licensing
Stablecoin Rules
Regulated under EU MiCA framework; Luxembourg hosts major stablecoin issuers
Key Points
- CBB Crypto-Asset Module provides a full regulatory framework for exchanges, custodians, and brokers
- No personal income tax or capital gains tax in Bahrain
- Licensed exchanges include Binance (CoinMENA), Rain, and others
- VASPs must meet AML/CFT requirements and obtain CBB licensing
- Bahrain positions itself as a regional fintech and crypto hub
Key Points
- CSSF oversees VASPs under the Luxembourg AML/CFT framework
- Individuals holding crypto for 6+ months are generally exempt from capital gains tax
- Short-term gains taxed at progressive income tax rates up to 42%
- Major hub for crypto investment funds and blockchain companies
- MiCA framework fully applicable from December 2024