SIO-10.2 Custodial Arrangements
SIO-10.2.1
Stablecoin issuers must provide to the CBB, for prior written approval, details of custodial arrangement put in place to safeguard, store, hold or maintain custody of approved stablecoins.
Added: July 2025SIO-10.2.2
Stablecoin issuers may implement the following three types of custodial arrangements or any other type of custodial arrangement that is acceptable to the CBB:
(a) The stablecoin issuer is wholly responsible for custody of client’s approved stablecoins and provides this service “in-house” through its own wallet solution. Such an arrangement includes scenarios where a licensee provides its own inhouse proprietary wallet for clients to store any approved stablecoins bought through that licensee or transferred into the wallet from other sources.(b) The stablecoin issuer is wholly responsible for the custody of client’s approved stablecoins but outsources this service to a third-party custodian. Such an arrangement includes the scenario where a licensee uses a third-party service provider to hold all its clients’ approved stablecoins (e.g., all or part of the clients’ private keys).(c) The stablecoin issuer wholly allows clients to hold their approved stablecoins in self-custody. Clients are required to source and use their own third-party custodians (which the licensee have no control over or responsibility for). This arrangement also includes the scenario where licensees provide an in-house wallet service for clients but also allow clients to transfer their approved stablecoins out of this wallet to another wallet from a third-party wallet provider chosen by the client (and which the licensee does not control).Added: July 2025Third Party Custody Arrangement
SIO-10.2.3
For the purposes of Paragraph SIO-10.2.2(b), where a stablecoin issuer provides a third-party custodian to a client it must undertake an appropriate risk assessment of that custodian. Stablecoin issuers must also retain ultimate responsibility for safe custody of approved stablecoins held on behalf of clients and ensure that they continue to meet all their regulatory obligations with respect to custody service and outsourced activities.
Added: July 2025SIO-10.2.4
In undertaking an appropriate risk assessment of the third-party custodian in accordance with Paragraph SIO-10.2.3, stablecoin issuers should take into account any or all of the following:
(a) The expertise and market reputation of the third-party custodian, and once an approved stablecoin has been lodged by the licensee with the third-party custodian, the crypto-asset custodian’s performance of its services to the licensee;(b) The arrangements, including cyber security measures, for holding and safeguarding approved stablecoins;(c) An appropriate legal opinion as to the protection of approved stablecoins in the event of insolvency of the custodian;(d) Whether the third-party custodian is regulated and by whom;(e) The capital or financial resources of the third-party custodian;(f) The credit rating of the third-party custodian; and(g) Any other activities undertaken by the third-party custodian and, if relevant, any affiliated company.Added: July 2025SIO-10.2.5
When assessing the suitability of the third-party custodian, the stablecoin issuers must ensure that the third-party custodian will ensure full protections to client assets (approved stablecoins) and that the client assets (approved stablecoins) are fully segregated, both legally and operationally, from the own assets of the third-party custodian.
Added: July 2025SIO-10.2.6
A stablecoin issuer that safeguards, stores, holds or maintains custody of approved stablecoins with a third-party custodian, must establish and maintain a system for assessing the appropriateness of its selection of the custodian and assess the continued appointment of that custodian periodically as often as is reasonable. The licensee must make and retain a record of the grounds on which it satisfies itself as to the appropriateness of its selection or, following a periodic assessment, continued appropriateness of the approved stablecoin custodian.
Added: July 2025Self-Custody Arrangement
SIO-10.2.7
For the purposes of Paragraph SIO-10.2.2(c), the CBB considers scenarios where clients are required to hold their approved stablecoins in self-custody as being a material risk given that the burden of protecting and safeguarding approved stablecoins falls wholly upon clients. As such, stablecoin issuers requiring clients to hold their approved stablecoins in self-custody are required to disclose this fact fully and clearly upfront to clients.
Added: July 2025
