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The Central Bank of Bahrain (CBB) has introduced a framework to launch a formal framework of stablecoins.

It was a breakthrough in the regulation of digital assets in the country. The Stablecoin Issuance and Offering (SIO) Module became active this week.Bahrain Introduces Stablecoin Issuance and Offering (SIO) Module

Bahrain has created the Stablecoin Issuance and Offering (SIO) Module. It will offer financial stability to the parties wishing to issue or offer stablecoins in the Kingdom.
The purpose of the new framework is to provide the opportunity to use stablecoins in the Bahraini financial ecosystem in a compliant way.
Stablecoin Issuance Offering (SIO) Source: CBB

Notably, the SIO Module has been placed within a larger scheme by the Central Bank of Bahrain to increase electronic financial solutions without compromising the regulatory rules.
The module prescribed governing, asset backing, redemptions, and auditing processes that stablecoin issuers must observe.In addition, it also ensured alignment with anti-money laundering (AML) and counter-terrorism financing (CFT) protocols.

By doing so, the CBB will reate a reliable environment for both issuers and users of digital currencies pegged to fiat assets.
New Framework to Govern Stablecoin Activities in Bahrain
Under the SIO Module, any entity that wishes to issue, offer, or facilitate transactions in stablecoins must undergo a licensing process with the Central Bank of Bahrain.

This includes submission of detailed business plans, audited financials, and clear disclosures about the asset backing the stablecoin.
The framework mandates that stablecoins must be fully backed by high-quality liquid assets such as cash or cash equivalents.
Besides, the module also specified how reserve assets should be extracted and periodical disclosure should be made to ensure clarity.
Issuers must also ensure that customer funds are separate and should have documentation of 1:1 backing.
Moreover, some externally recognized audit reports will be used as backup for the tokens. The degree of control is aimed at minimizing the risks of depegging or collapse.
Central Bank Reinforces Oversight of Digital Asset Services
More so, the launch of the SIO Module is part of Bahrain’s growing efforts to regulate financial technologies without hindering innovation.

With this framework, the CBB is extending its supervisory capacity to cover stablecoin-related activities, which have seen increasing adoption.
Furthermore, the SIO Module launch is also a part of the increasing attempts of Bahrain to control financial technologies without restraining innovation.
Under this framework, the CBB is expanding its supervisory remit to include activities involving stablecoins. They have gained greater adoption among retail as well as institutional money.
Binance Subsidiary BPay Global Licensed in Bahrain
Before introducing the stablecoin module, the Central Bank of Bahrain had already approved the operations of Binance subsidiary, BPay Global, as a licensed payment service provider.
This license allows BPay Global to offer digital payment solutions and operate under the CBB’s supervision within Bahrain.Consequently, the introduction of BPay Global into the Bahraini market indicated the readiness by the regulator to engage with large digital finance institutions.The company was approved following compliance with customer protection, anti-money laundering, and operational risk management requirements.Recently, the U.S. Senate passed the GENIUS Act establishing the first federal framework for dollar-pegged stablecoins.The bill sets reserve and transparency requirements for stablecoin issuers, and it heads to the House for approval. If signed, the law would apply to major issuers like Tether and Circle within six months.

June 26, 2025 — In a landmark move for the U.S. banking sector, the Federal Reserve has confirmed that banks may offer services to cryptocurrency firms, provided they comply with established financial and consumer protection standards. The decision was announced during Fed Chair Jerome Powell’s testimony before the House Financial Services Committee on June 24.
🏦 Regulatory Shift: Reputational Risk Removed
On June 23, the Federal Reserve officially removed “reputational risk” from its bank supervision manual—a change that eliminates a longstanding, subjective barrier to crypto banking. This policy shift means that financial institutions will no longer be penalized or discouraged from serving crypto clients based on vague reputational concerns.
Instead, regulatory focus will now center solely on quantifiable financial, legal, and operational risks. This aligns the Fed’s position with those of the FDIC and the Office of the Comptroller of the Currency (OCC), both of which made similar revisions earlier in 2025.
🔁 Unified Oversight Across Agencies
The updated guidance reflects a more coordinated and transparent regulatory stance among major U.S. banking authorities. Under the new framework:
Banks can choose to work with cryptocurrency firms based on measurable risk factors.Examiners are no longer permitted to block lawful crypto-related services citing reputational concerns.Fed examiners will receive updated training to ensure consistent implementation across all supervised institutions.
This unified approach is expected to strengthen confidence among banks exploring digital asset partnerships and services.
💼 Crypto Services on the Rise
With the reputational risk obstacle removed, banks are now positioned to expand into a range of crypto-related offerings, including:
Custody solutionsCrypto payment and settlement infrastructureTokenized asset support and advisory services
For years, industry stakeholders criticized the reputational risk standard as arbitrary and overly restrictive. Its removal marks a turning point, offering regulatory clarity that could spur innovation and broader institutional participation in the crypto sector.
⚖️ Fed Emphasizes Strong Risk Management
Despite the policy shift, the Fed reiterated that banks must adhere to strict standards regarding:
Legal complianceCredit exposureLiquidity and operational risks
The central bank has not committed to a specific timeline for further crypto-related guidance, but officials stressed that all digital asset activity must be conducted responsibly, with consumer protection and financial stability as top priorities.
📊 Broader Economic Context
Alongside the crypto update, the Fed also commented on macroeconomic conditions. Inflation remains above the 2% target, and while rate cuts are still under consideration, ongoing uncertainty—especially surrounding tariffs and fiscal policy—continues to complicate outlooks.
🧩 Conclusion: A New Era of Crypto-Banking Integration
The Fed’s decision to eliminate reputational risk from its regulatory playbook opens the door for U.S. banks to serve the crypto industry more confidently. With consistent standards across regulatory bodies, banks can now pursue digital asset services without fear of ambiguous enforcement, provided they uphold core financial risk controls.
This regulatory clarity could mark a significant step toward the mainstream integration of cryptocurrencies within the U.S. financial system.
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