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Digital Asset Reserve

Definition

A digital asset reserve refers to a collection of digital assets held by an entity to back the value of another digital asset, typically a stablecoin. These reserves provide collateral, aiming to maintain a stable peg or support the solvency of the associated digital currency. The assets held can range from fiat currency and traditional securities to other cryptocurrencies. Transparency and auditability of these reserves are crucial for user confidence and market stability.