A stablecoin is a digital asset designed to maintain a steady value by pegging its price to another asset, most commonly a fiat currency like the U.S. dollar. Stablecoin reserve requirements are the rules determining the assets an issuer must hold to back up every stablecoin it puts into circulation.
Major jurisdictions with stablecoin reserve requirements include the United States under the GENIUS Act and the European Union under its MiCA regulation. Under both stablecoin regimes, reserves must contain 1:1 backing and be restricted to low-risk liquid assets. They must be held separate from the issuer’s corporate funds, and their composition must be reported publicly on a regular basis.
In this article, we'll cover what stablecoin reserves are, what the current regulations require across the major jurisdictions, and why those requirements are important.
What Are Stablecoin Reserves?
A stablecoin reserve is the pool of assets an issuer holds to back the stablecoin tokens it has issued. When someone sends $1 to an issuer and receives one stablecoin token, that dollar goes into the reserve pool. The token represents a claim to one dollar against that pool.
