How to assess stablecoin reserve disclosures
You assess a stablecoin's reserve disclosures by opening the issuer's latest report, comparing reserves with tokens outstanding, and checking redemption terms.
Vahe HakobyanEditor-in-chief
Updated Oct 5, 20263 min readFact-checked
On this page
- Open the issuer's own reserve report.
- Check the date, preparer and asset mix.
- Compare reserves with tokens outstanding.
- Keep a copy; a report is not an audit.
A reserve report is a snapshot of what the issuer held on one date. The name stablecoin does not make the value stable, so the report is a starting point for your own checks.
What do you need before you start
You do not need an account or special software to read a reserve report. Open the issuer's own website and find its reserves or attestations page.
How do you assess reserve disclosures
A report lists assets as of one date, so read it in a fixed order. The steps run from the report's own facts to the rules for getting money back.
- 1Check the date and preparerThe cover shows when the snapshot was taken and which firm prepared or attested it. A report from months ago may not match the reserve mix today.
- 2Read the reserve mixCash, short-term government debt and bank deposits are common holdings. Watch for riskier assets or loans to companies tied to the issuer counted as reserves.
- 3Compare reserves with tokensCompare the total reserve value with the tokens in circulation. A buffer above the tokens outstanding means the issuer holds more than it owes.
- 4Find the redemption rulesLook for who may redeem, what conditions apply, and how long settlement takes. These terms decide how you get your money back.
What should you do after reviewing
An attestation shows assets on one date and usually does not test controls the way a full audit does. Write down what it leaves open.
Frequently asked questions
An attestation checks certain records on one date. A full audit also examines controls over a period and gives more assurance.
Check when the issuer publishes a new report, and before any large decision that depends on the stablecoin.
The stablecoin is undercollateralized, and redemptions may be limited or delayed. Its market price can fall below the peg.
No. The report shows assets on one date, not whether the issuer can handle a rush of redemptions.
