A stablecoin aims to track a reference value, often a currency. The mechanism matters: fiat reserves, crypto collateral and algorithmic incentives do not provide the same protections. For a reserve-backed token, assets somewhere in the system are only part of the story. Who can redeem, against whom, and under what conditions is equally important.
Four documents to connect
Table scrolls horizontally
| Evidence | What it helps establish |
|---|---|
| Reserve composition and date | Asset quality, liquidity and valuation basis |
| Holder terms | Who has a claim and where it ranks |
| Redemption policy | Eligibility, minimum amount, fees and timing |
| Assurance report scope | What was checked, when, and which liabilities were included |
An exchange sale is not issuer redemption
A retail holder may only be able to sell to another market participant, while direct redemption is limited to eligible customers. If market demand weakens or reserve access is disrupted, the market price can depart from its target. Even high-quality reserves cannot remove operational, custody and legal-access risks.
Do not merge three separate promises
- Price stability, redemption rights and yield paid by a lending platform are different arrangements. Lending a stablecoin adds the borrower’s and platform’s risks.
- A reserve attestation is not automatically a full financial-statement audit, deposit insurance or a guarantee of future liquidity. Read the actual scope and date.
Further reading
General information only; not investment advice, an offer or a recommendation. Any participation is subject to eligibility, documentation and applicable permissions. Capital and returns are not guaranteed; some or all capital may be lost.