SIO-6.1 Reserve Asset Composition and Management
SIO-6.1.1
Stablecoin issuers, at all times, must hold and maintain sufficient reserve assets such that the value of the reserve assets must be equivalent to at least one hundred percent (100%) of the par value of the outstanding approved stablecoins in circulation, including those held by the licensee.
Added: July 2025SIO-6.1.2
Stablecoin issuers must ensure that the reserve assets held are:
(a) denominated in the same reference currency i.e. the fiat currency that the approved stablecoin purports to represent (except for Bahraini Dinar denominated stablecoin (see Paragraph SIO-6.1.8));(b) sufficient in value to back each one of the approved stablecoins issued;(c) stable in value; and(d) sufficiently liquid to meet the permanent right of redemption of the clients.Added: July 2025SIO-6.1.3
For the purposes of Paragraph SIO-6.1.1, stablecoin issuers must ensure that the reserve assets are valued on a daily basis by using their current market value i.e. the reserve assets are marked to market on a daily basis for the purpose of valuation.
Added: July 2025SIO-6.1.4
When using mark-to-market valuation the reserve assets must be valued at the prudent side of the bid and offer unless the reserve assets can be closed out at mid-market value. Only market data of good quality should be used, and data should be assessed on all of the following factors:
(a) the number and quality of counterparties;(b) the volume and turnover in the market of the reserve asset;(c) the total size of the reserve asset.Added: July 2025SIO-6.1.5
Where use of mark-to-market as referred to Paragraph SIO-6.1.3 is not possible or the market data is not of sufficiently good quality, the reserve asset must be valued conservatively by using mark-to-model. The model should accurately estimate the intrinsic value of the reserve asset, based on all of the following up-to-date key factors:
(a) the volume and turnover in the market of that reserve asset;(b) the total size of the reserve asset;(c) the market risk, interest rate risk and credit risk attached with the reserve asset.Added: July 2025Composition of Reserve Assets
SIO-6.1.6
Stablecoin issuers must ensure that the reserve assets are of high quality and high liquidity with minimal market, credit and concentration risk. In determining the composition of the reserve assets, stablecoin issuers must take into account the liquidity requirements of the approved stablecoin under consideration and how the reserve assets will be managed and invested without any risk to clients permanent right of redemption.
Added: July 2025SIO-6.1.7
Stablecoin issuers must ensure that the composition of reserve assets only includes the following:
(a) Cash and deposits callable at one day notice held with banks rated at a minimum AA- or equivalent. The CBB recognises Standard and Poor’s, Moody’s, Fitch as eligible credit rating agencies. With respect to the possible recognition of other rating agencies as eligible credit rating agencies, the stablecoin issuer should undertake discussion with the CBB and provide the CBB with necessary information and justification;(b) Debt securities with residual maturity of 90 days or less issued by the central bank of the reference currency;(c) Repurchase agreement with a maturity of 7 days or less which are backed by (b) above; and(d) Short term government money market funds.Added: July 2025SIO-6.1.8
In addition to the requirement of Paragraph SIO-6.1.7, stablecoin issuers issuing Bahraini Dinar (BHD) backed approved stablecoins can invest in US Dollar (USD) denominated T-bills with residual maturity of 90 days or less issued by the central bank of the reference currency.
Added: July 2025Segregation of Reserve Assets
SIO-6.1.9
Stablecoin issuers must put in place effective arrangement to ensure that the:
(a) reserve assets are legally segregated from the licensee’s own assets so that creditors of the stablecoin issuers have no recourse to the reserve assets in the event of insolvency; and(b) reserve assets are operationally segregated from the stablecoin issuer’s own assets.Added: July 2025SIO-6.1.10
Stablecoin issuers that offer two or more approved stablecoins must operate and maintain segregated pools of reserves assets for each approved stablecoin. Each of those pools of reserves assets must be managed separately.
Added: July 2025SIO-6.1.11
Stablecoin issuers must put in place effective internal control measures and procedures to protect the reserve assets from operational risks, including the risks of theft, fraud and misappropriation.
Added: July 2025SIO-6.1.12
Stablecoin issuers must put in place an investment policy for the reserve assets which should be reviewed for suitability on an annual basis or more frequently depending on the nature, size and complexity of the business.
Added: July 2025SIO-6.1.13
Stablecoin issuers must appoint a qualified person as head of reserve asset management with appropriate authority to implement the investment policy referred to in Paragraph SIO-6.1.12. The appointed person shall be responsible for effective implementation of the investment policy.
Added: July 2025SIO-6.1.14
Stablecoin issuers must ensure that the issuance and redemption of approved stablecoin is always matched by a corresponding increase or decrease in the reserve assets.
Added: July 2025
