SIO-2 Licensing
SIO-2.1 Application for License
SIO-2.1.1
Applicants for a stablecoin issuer license must submit a duly completed Form 1 (Application for a License), under cover of a letter signed by an authorised signatory of the applicant marked for the attention of the Director, Licensing Directorate. The application must be accompanied by the documents listed in Paragraph SIO-2.1.4, unless otherwise directed by the CBB.
Added: July 2025SIO-2.1.2
Applicants seeking a stablecoin issuer license from the CBB must pay a non-refundable license application fee of BD 100 at the time of submitting their formal application to the CBB.
Added: July 2025SIO-2.1.3
References to applicant mean the potential licensee seeking a license. An applicant may appoint a representative, such as a law firm or professional consultancy, to prepare and submit the application. However, the applicant retains full responsibility for the accuracy and completeness of the application and is required to certify the application form accordingly. The CBB also expects to be able to liaise directly with the applicant during the licensing process, when seeking clarification of any issues.
Added: July 2025SIO-2.1.4
Unless otherwise directed by the CBB, the following documents must be provided in support of the application for license:
(a) A duly completed Form 2 (Application for Authorisation of Shareholders) for each Shareholder of the proposed licensee;(b) A duly completed Form 3 (Application for approval of Board directors and senior management), for each individual proposed to undertake a controlled function (as provided for in Paragraph SIO-2.5.2) in the proposed licensee;(c) A comprehensive business plan for the application, addressing the matters described in Paragraph SIO-2.1.6;(d) A copy of the applicant’s commercial registration certificate;(e) A certified copy of a Board resolution of the applicant, confirming its decision to seek a CBB stablecoin issuer license;(f) In the case of applicants that are part of a group, either a letter of no objection to the proposed license application from the applicant’s lead supervisor, together with confirmation that the group is in good regulatory standing and is in compliance with applicable supervisory requirements, including those relating to capital requirements or the group is able to demonstrate that it has:
(i) minimum three years of satisfactory business track record preferably as a stablecoin issuer or crypto asset business or as a financial institution supervised by a relevant supervisory authority; and(ii) a management team with necessary expertise in respect of corporate governance and conduct of business matters relevant to the proposed regulated activities;(g) In the case of applicants that are part of a group, copies of the audited financial statements of the applicant’s group, for the three years immediately prior to the date of application;(h) In the case of applicants not falling under (g) above, copies of the audited financial statements of the applicant’s substantial shareholder (where they are a legal person), for the three years immediately prior to the date of application;(i) A copy of the applicant’s memorandum and articles of association (in draft form for applicants creating a new company);(j) A draft stablecoin whitepaper with all the information pertaining to the stablecoin as stipulated in Chapter 7; and(k) A description of the system and procedure in place to safeguard the integrity and confidentiality of data;(l) Details of their proposed external auditor to the CBB as part of their license application.Added: July 2025SIO-2.1.5
The CBB, in its absolute discretion, may ask for a letter of guarantee from the applicant’s controlling or major shareholders on a case-by-case basis as it deems appropriate/necessary as part of the required documents to be submitted pursuant to Paragraph SIO- 2.1.4 above.
Added: July 2025SIO-2.1.6
The business plan submitted in support of an application must include:
(a) An outline of the history of the applicant and its shareholders including the Ultimate Beneficiary Owners (UBO);(b) A description of the proposed, current, and historical business of the applicant, including detail on the products and services provided and to be provided, all associated websites addresses, the jurisdictions in which the applicant is engaged in business, the principal place of business, the primary market of operation and the projected client base;(c) Particulars of supervisory authority together with contact information for the businesses in jurisdictions that are subject to regulation;(d) The reasons for applying for a license, including the applicant’s analysis of the feasibility and market viability, market size and strategy and market objectives;(e) Description of geographic segments in which the applicant will operate from Bahrain;(f) Details of the KYC and customer on-boarding process;(g) The proposed Board and senior management of the applicant and the proposed organisational structure of the applicant along with the proposed organization chart and the reporting lines;(h) Detailed business process flows from end to end for each significant service/product offering;(i) An assessment of the risks that may be faced by the applicant, together with the proposed systems and controls framework to be put in place for addressing those risks and to be used for the main business functions;(j) An opening balance sheet for the applicant, together with a three-year financial projection (i.e. balance sheet, income statement, cash flows statement and statement of change in equity), with all assumptions clearly outlined, demonstrating that the applicant will be able to meet applicable capital adequacy requirements;(k) Details of banking arrangements, reserve asset management arrangement and approved stablecoin custody arrangement;(l) A copy of business continuity plan; and(m) A description of the IT system that will be used, including details of how the IT system and other records will be backed up.Added: July 2025SIO-2.1.7
The applicant’s memorandum and articles of association must explicitly provide for it to undertake the activities proposed in the license application and must preclude the applicant from undertaking other regulated services, or commercial activities, unless these arise out of its regulated stablecoin issuance services or are incidental to those.
Added: July 2025SIO-2.1.8
All documentation provided to the CBB as part of an application for a license must be in either the Arabic or English languages. Any documentation in a language other than English or Arabic must be accompanied by a certified English or Arabic translation thereof.
Added: July 2025SIO-2.1.9
Any material changes or proposed changes to the information provided to the CBB in support of a licensing application that occurs prior to licensing must be reported to the CBB.
Added: July 2025SIO-2.1.10
Failure to inform the CBB of the changes specified in Paragraph SIO-2.1.9 is likely to be viewed as a failure to provide full and transparent disclosure of information, and thus a failure to meet licensing condition stipulated in Paragraph SIO-3.1.1 (i)
Added: July 2025Licensing Process and Timelines
SIO-2.1.11
Articles 44 to 47 of the CBB Law govern the licensing process which stipulate that the CBB will issue its decision within 60 calendar days of an application being deemed complete (i.e. containing all required information and documents). By law, the 60 days’ time limit only applies once the application is complete and all required information (which may include any clarifications requested by the CBB) and documents have been provided. This means that all the information specified in Paragraph SIO-2.1.4 should be provided, before the CBB may issue a license.
Added: July 2025SIO-2.1.12
Potential applicants are encouraged to contact the CBB at an early stage to discuss their plans, for guidance on the CBB’s license and associated requirements. The Licensing Directorate would normally expect to hold at least one pre-application meeting with an applicant, prior to receiving an application.
Added: July 2025SIO-2.1.13
Potential applicants should initiate pre-application meetings in writing, setting out a short summary of their proposed business and any issues or questions that they may have already identified, once they have a clear business proposition in mind and have undertaken their preliminary research. The CBB can then guide the applicant on the specific areas in the Rulebook that will apply to them and the relevant requirements that they must address in their application.
Added: July 2025SIO-2.1.14
An applicant must not hold himself out as having been licensed by the CBB, prior to the issuance of the CBB’s Resolution on granting the license. Failure to do so may constitute grounds for refusing an application and result in a contravention of Article 42 of the CBB Law (which carries a maximum penalty of BD 1 million).
Added: July 2025Granting or Refusal of License
SIO-2.1.15
Should a license be granted, the CBB will notify the applicant in writing of the fact; the CBB will also publish its decision to grant a license in the Official Gazette and in two local newspapers (one published in Arabic, the other in English). The license may be subject to such terms and conditions as the CBB deems necessary for the additional conditions being met.
Added: July 2025SIO-2.1.16
The CBB may reject an application for a license if in its opinion:
(a) The requirements of the CBB Law or the Rulebook are not met;(b) False or misleading information has been provided to the CBB, or information which should have been provided to the CBB has not been so provided; or(c) The CBB believes it necessary in order to safeguard the interests of potential clients.Added: July 2025SIO-2.1.17
Where the CBB intends to refuse an application for a license, it must give the applicant written notice to that effect. Applicants will be given a minimum of 30 calendar days from the date of the written notice to appeal the decision, as per the appeal procedures specified in the notice.
Added: July 2025SIO-2.1.18
Before the final approval is granted to an applicant, a confirmation from a licensed retail bank addressed to the CBB that the minimum capital, as specified in this Module, has been paid in must be provided to the CBB.
Added: July 2025Commencement of Operations
SIO-2.1.19
Prior to commencement of operation a stablecoin issuer must provide to the CBB (if not previously submitted):
(a) The registered office address and details of premises to be used to carry out the business of the proposed stablecoin issuer;(b) The stablecoin issuer’s contact details including telephone and fax number, e-mail address and website;(c) A copy of the auditor’s acceptance to act as auditor for the applicant;(d) A copy of the applicant’s notarized memorandum and articles of association, addressing the matters described in Paragraph SIO-2.1.9;(e) A copy of the commercial registration certificate in Arabic and in English from the Ministry of Industry and Commerce;(f) A written confirmation from the bank, financial institution and custodian, addressed to the CBB providing details about the banking arrangements for subscription money, reserve asset management arrangement and custody arrangement that has been made by the stablecoin issuer;(g) Where the stablecoin issuer has entered into an agreement with a third party for custody arrangement, a copy of the written agreement between the stablecoin issuer and the third party.Added: July 2025SIO-2.1.20
Licensed stablecoin issuers must commence their commercial operations within 6 months of being granted a license by the CBB, failing which the CBB may cancel the license, in accordance with the provisions of the CBB Law.
Added: July 2025SIO-2.1.21
In addition, the CBB may vary existing requirements or impose additional restrictions or requirements, beyond those already specified for stablecoin issuers, to address specific risks.
Added: July 2025SIO-2.2 Voluntary Surrender, Cancellation or Amendment of License
Voluntary Surrender of a License
SIO-2.2.1
In accordance with Article 50 of the CBB Law, a stablecoin issuer intending to cease carrying out all the approved regulated stablecoin offering services, must obtain the CBB’s written approval, before ceasing regulated stablecoin offering services. All such requests must be made in writing to the Director, Capital Markets Supervision, setting out in full the reasons for the request and how the business is to be wound up.
Added: July 2025SIO-2.2.2
Stablecoin issuers must satisfy the CBB that their clients’ interests are to be safeguarded during and after the proposed cancellation.
Added: July 2025SIO-2.2.3
The CBB will approve a request for cancellation of license by a stablecoin issuer where there are no outstanding regulatory concerns and client interests would not be prejudiced. A voluntary surrender will only be allowed to take effect once the stablecoin issuer, in the opinion of the CBB, has discharged all its regulatory obligations towards clients.
Added: July 2025Cancellation of a License by the CBB
SIO-2.2.4
Pursuant to Article 48 (c) of the CBB Law, the CBB may cancel a license, for instance if a stablecoin issuer fails to satisfy any of its existing license conditions or in order to protect the legitimate interests of clients or creditors of the licensee. The CBB generally views the cancellation of a license as appropriate only in the most serious of circumstances and generally tries to address supervisory concerns through other means beforehand.
Added: July 2025SIO-2.2.5
The procedures for cancellation of a license are contained in Articles 48 and 49 of the CBB Law.
Added: July 2025SIO-2.2.6
The CBB will only effect the cancellation once a stablecoin issuer has discharged all its regulatory responsibilities to clients. Until such time, the CBB will retain all its regulatory powers towards the licensee and will direct the stablecoin issuer so that no new regulated stablecoin issuance may be undertaken whilst the licensee discharges its obligations to its clients.
Added: July 2025Amendment to the scope of regulated services under the license or Amendment of the license
SIO-2.2.7
Stablecoin issuers wishing to vary the scope of the regulated stablecoin offering services under their existing license, whether by adding or ceasing some services, must obtain CBB’s prior written approval.
Added: July 2025SIO-2.3 Publication of the Decision to Voluntarily Surrender, Cancel or Amend a License
SIO-2.3.1
In accordance with Articles 47 and 49 of the CBB Law, the CBB must publish its decision to voluntarily surrender, cancel or amend a license in the Official Gazette and in two local newspapers, one in Arabic and the other in English.
Added: July 2025SIO-2.3.2
For the purposes of Paragraph SIO-2.3.1, the cost of publication must be borne by the stablecoin issuer.
Added: July 2025SIO-2.3.3
The CBB may also publish its decision on such cancellation or amendment using any other means it considers appropriate, including electronic means.
Added: July 2025SIO-2.4 Annual License Fees
SIO-2.4.1
Licensed stablecoin issuers must pay the relevant annual license fee to the CBB, on 1st December of the preceding year for which the fee is due.
Added: July 2025SIO-2.4.2
The relevant fees are specified in Paragraph SIO-2.4.3 below. The fees due on 1st December are those due for the following calendar year but are calculated on the basis of the firm’s latest audited financial statements for the previous calendar year: i.e. the fee payable on 1st December 2013 for the 2014 year (for example), is calculated using the audited financial statements for 2012, assuming a 31st December year end. Where a licensee does not operate its accounts on a calendar-year basis, then the most recent audited financial statements available are used instead.
Added: July 2025SIO-2.4.3
The variable annual license fee payable by stablecoin issuer is 0.25% of their relevant operating expenses, subject to a minimum fee of BD 5000 and maximum fee of BD 12,000.
Added: July 2025SIO-2.4.4
Relevant operating expenses are defined as the total operating expenses of the stablecoin issuer concerned, as recorded in the most recent audited financial statements available, subject to the adjustments specified in Paragraph SIO-2.4.5.
Added: July 2025SIO-2.4.5
The adjustments to be made to relevant operating expenses are the exclusion of the following items from total operating expenses:
(a) Training costs;(b) Charitable donations;(c) CBB fees paid; and(d) Non-executive Directors’ remuneration.Added: July 2025SIO-2.4.6
For the avoidance of doubt, operating expenses for the purposes of this Section, do not include items such as depreciation, provisions, interest expense, and dividends.
Added: July 2025SIO-2.4.7
The CBB would normally rely on the audited accounts of a stablecoin issuer as representing a true and fair picture of its operating expenses. However, the CBB reserves the right to enquire about the accounting treatment of expenses, and/or policies on intra-group charging, if it believes that these are being used artificially to reduce a license fee.
Added: July 2025SIO-2.4.8
Stablecoin issuers must complete and submit Form ALF (Annual License Fee) to the CBB, no later than 15th October of the preceding year for which the fees are due.
Added: July 2025SIO-2.4.9
Stablecoin issuers are subject to direct debit for the payment of the annual fee and must complete and submit to the CBB a Direct Debit Authorisation Form by 15th September available under Part B of Volume 6 (Capital Markets) CBB Rulebook on the CBB website.
Added: July 2025SIO-2.4.10
For newly licensed stablecoin issuers, the first annual license fee is payable when the license is issued by the CBB. The amount payable is the minimum amount stipulated in Paragraph SIO-2.4.3.
Added: July 2025SIO-2.4.11
For the first full year of operation, a stablecoin issuer would calculate its fee as the floor amount. For future years, the stablecoin issuer would submit the Form ALF by 15th October of the preceding year for which the fees are due and calculate its fee using its last audited financial statements (or alternative arrangements as agreed with CBB, should its first set of accounts cover an 18-month period).
Added: July 2025SIO-2.4.12
Where a license is cancelled (whether at the initiative of the firm or the CBB), no refund is paid for any months remaining in the calendar year in question.
Added: July 2025
