Loading ...But then who holds the reserves. Say if we feared bank failures what’s the fastest way to get your money out? To transfer to a broker then buy dollars or treasures could take days. Stable coin would be the fastest. Now if brokers could take them that would help.
So who are the reserves. I checked.
Stablecoin reserves are typically held by regulated U.S. financial institutions or pre-approved custodians. These reserves are segregated from the issuer’s other assets and are held for the benefit of stablecoin holders. The reserves consist of assets like U.S. Treasury bills, cash, and other liquid assets.
Here’s a more detailed breakdown:
- Regulated Institutions: Stablecoin reserves are often placed as deposits with U.S. banks.
- Custodians: Some issuers may also use pre-approved custodians to hold the reserves.
- Separation: The reserves must be kept separate from the issuing entity’s other assets.
- Reserves Composition: Acceptable reserves include US coins and currency, deposits with Federal Reserve Banks, demand deposits at insured depository institutions, Treasury bills, notes, or bonds with a maturity of 93 days or less, certain repurchase agreements, reverse repurchase agreements, and money market funds.
- Transparency: Many stablecoin issuers publish monthly disclosures of their reserve composition, which are often examined by registered public accounting firms.