The Central Bank of Bahrain (CBB) has introduced a new module to regulate stablecoins, a significant step in the field of digital assets.
Introduction of Stablecoins in Bahrain
The Central Bank of Bahrain has developed the Stablecoin Issuance and Offering (SIO) Module, which became active this week. This module aims to provide financial stability for parties wishing to issue or offer stablecoins in the Kingdom.
New Regulatory Module for Stablecoins
Under the SIO Module, any entity wishing to issue, offer, or facilitate transactions in stablecoins must undergo a licensing process with the Central Bank of Bahrain. This includes the submission of detailed business plans, audited financial statements, and clear disclosures about the supporting assets. Stablecoins must be fully backed by high-quality liquid assets such as cash or cash equivalents.
Enhanced Oversight of Digital Assets
The launch of the SIO Module is part of Bahrain's efforts to regulate financial technologies without hindering innovation. The CBB is extending its supervisory capacity to cover stablecoin-related activities, which have seen increasing popularity among retail and institutional investors.
Thus, the new measures introduced by the Central Bank of Bahrain highlight the country’s commitment to establishing a regulatory framework for the safe use of stablecoins in the fintech sector.
