What is the Definition of Full Reserve Backing?

Full reserve backing signifies that a digital asset, typically a stablecoin, maintains reserves equal to or exceeding 100% of its circulating supply. This means that for every unit of the digital asset issued, there is at least one unit of the underlying reserve asset held in custody. The reserve assets can consist of fiat currency, other cryptocurrencies, or a combination of various assets. This approach aims to provide maximum stability and confidence in the digital asset's peg. It ensures that all issued tokens can be redeemed at their stated value.

What is the Context of Full Reserve Backing?

News frequently reports on stablecoins and their reserve backing, with a strong emphasis on transparency and the composition of these reserves. Discussions often focus on the auditing of reserve assets and the potential risks associated with different backing structures. Full reserve backing is a critical factor for regulatory scrutiny and investor trust, especially following past stablecoin instability events.

Full Reserve Backing ∞ News

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∞Staking Services

∞Client Asset Segregation

∞Trading Services

Swiss Council Proposes Two New Licensing Categories for Digital Asset Firms

New Swiss framework mandates dual licensing, requiring full asset backing and segregation for stablecoin and custody providers.

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∞Market Surveillance

∞Token Listing Review

∞Regulatory Oversight

South Korea Enacts Digital Asset Basic Act Establishing Unified Market Oversight

The Digital Asset Basic Act mandates a unified VASP licensing regime and strict stablecoin reserve requirements, fundamentally altering market access and operational risk for all participants.

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∞Financial Stability

∞State Federal Alignment

∞Stablecoin Issuer Licensing

Congress Mandates Stablecoin Issuers Maintain Full Reserves and Prohibits Yield

The new federal stablecoin law mandates a 100% reserve framework and prohibits yield, fundamentally restructuring issuer capital and product offerings for legitimacy.

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∞Interest Prohibition

∞Risk

∞Reserve Backing

US Congress Establishes Federal Stablecoin Framework Mandating Full Reserve Backing

Issuers must now architect compliance systems around the 100% liquid reserve mandate and the definitive prohibition on stablecoin interest payments.

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∞Asset

∞Financial System

∞Regulation

Congress Passes GENIUS Act Establishing Federal Stablecoin Regulatory Framework

The new federal stablecoin regime mandates 100% liquid reserves and BSA compliance, structurally redefining payment rails for all issuers.

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∞Qualified Custodian

∞Compliance Mandate

∞Stablecoin Regulation

US Congress Enacts GENIUS Act Establishing Federal Stablecoin Regulatory Framework

The GENIUS Act codifies payment stablecoins as a distinct asset class, mandating 1:1 reserve backing and creating a clear dual federal-state compliance path.

Full Reserve Backing

Definition

Context