Stablecoin reserves are the pool of assets an issuer holds to back the tokens it has put into circulation. For a dollar stablecoin, the reserve is typically made up of cash at banks, short-dated government debt, overnight repurchase agreements and shares in government money market funds. The purpose is simple: if every holder asked for their money back at once, the reserve should be large enough and liquid enough to pay them all at the promised value.
Reserves are the defining feature of a fiat-backed stablecoin. They are distinct from the crypto assets locked in smart contracts behind a crypto-backed stablecoin, which this wiki covers under stablecoin collateral. Since 2024 the content of reserves has been set by law in the European Union, and in the United States by the GENIUS Act of July 2025, whose rules take effect in January 2027.
Stablecoin reserves in plain terms
Think of a theatre cloakroom. You hand over your coat and get a numbered ticket, which is only worth something because the coat is still on the rail. If the attendant quietly lent coats out, some people would go home cold.
A stablecoin is the ticket and the reserve is the rail of coats. Holders rarely see the reserve, so they rely on rules about what may hang on the rail, on counts by outside checkers, and on the promise that the coats belong to ticket holders if the theatre goes bust.
What reserves hold
Good reserve assets keep their value and can be turned into cash within a day. The usual building blocks are:
- Cash and bank deposits. Money held in accounts at commercial banks or, for some regulated issuers, at a central bank. Deposits above any deposit insurance limit carry bank risk.
- Short-term government debt. Treasury bills are the core asset for most dollar coins because they are liquid and close to risk-free.
- Repo and reverse repo. Overnight repurchase agreements let an issuer lend cash against Treasury collateral and get it back the next morning.
- Money market funds. Shares in a government money market fund that itself holds only the assets above.
Before regulation, some issuers also held commercial paper, secured loans, gold or bitcoin, which earn more but can be hard to sell quickly at full value.
Measuring coverage
The basic test of a reserve is whether its market value at least equals the tokens outstanding. The coverage ratio is:
- Market value is what the reserve could be sold for today.
- Stablecoins outstanding excludes tokens the issuer holds itself.
- The peg value is the amount each token promises, for example $1.
Example: an issuer has 500 million tokens outstanding at $1 each and holds $300 million of Treasury bills, $180 million in bank deposits and $25 million in a government money market fund. The reserve is $505 million, so coverage is , or 101%. A ratio below 1 means the coin is not fully backed.
Rules on reserves
In the United States the GENIUS Act (Public Law 119-27, signed 18 July 2025) requires a permitted issuer to hold identifiable reserves of at least one dollar for every dollar of payment stablecoins issued. Section 4 limits eligible assets to cash, Federal Reserve balances, insured bank deposits, Treasury securities with 93 days or less to maturity, overnight repo and reverse repo backed by Treasuries, government money market funds holding only those assets, and tokenized forms of them. Reserves may not be pledged or reused except in narrow cases. Issuers must publish the reserve composition every month, have it examined by a registered public accounting firm, and have the chief executive and chief financial officer certify it. In an insolvency, holders get priority over other creditors on the required reserves. The Office of the Comptroller of the Currency published its final rule on 21 October 2026; it and the Act take effect on 18 January 2027.
In the European Union, MiCA treats single-currency coins as e-money tokens. Article 54 requires at least 30% of the funds received to be kept in separate accounts at credit institutions, with the rest in secure, highly liquid instruments in the same currency as the token. Multi-asset coins are asset-referenced tokens with their own reserve rules. The UK's Financial Conduct Authority published final rules for UK-issued qualifying stablecoins in June 2026 (PS26/10), with backing assets held on statutory trust for holders.
Transparency and verification
Holders cannot see bank statements, so trust depends on outside checks. Most issuers publish attestation reports in which an accounting firm confirms the reserve on a single date, a narrower check than a full audit by an independent auditor. Some projects add on-chain proof of reserves. As examples, Circle states that most USDC reserves sit in an SEC-registered government money market fund managed by BlackRock, with monthly third-party assurance, while Tether publishes quarterly attestations by BDO.
Risks and the question of yield
Reserves can fail in three ways. The assets can lose value, as when long-dated bonds fall after rate rises. They can be stuck, as in March 2023 when Circle disclosed $3.3 billion of USDC reserves at the failed Silicon Valley Bank and the coin briefly traded well below $1, a classic depeg. Or they can be insufficient to meet a run, because early redeemers are paid in full, a pattern known as first-mover advantage in redemptions, much like a bank run.
Reserves also earn interest, which is how most issuers make money; see reserve yield. Both the GENIUS Act and MiCA bar issuers from paying that interest to holders simply for holding the coin, which separates regulated payment stablecoins from yield-bearing stablecoins. How reserves are paid out when coins come back is covered under stablecoin redemption, and the company holding them under stablecoin issuer.