A one-to-one reserve mandate is a regulatory requirement stating that for every unit of a stablecoin issued, there must be an equivalent unit of reserve assets held in custody. This mandate ensures that the stablecoin is fully backed, providing stability and redeemability for its holders. It aims to mitigate liquidity risks and maintain the stablecoin’s peg to its underlying asset, typically a fiat currency. Adherence to this rule is critical for stablecoin credibility.
Context
The one-to-one reserve mandate is a central point of discussion in stablecoin regulation and public trust. News often reports on legislative proposals, audit findings, or enforcement actions related to this requirement. The debate continues regarding the types of assets permitted as reserves and the frequency of verification, directly influencing the stability and regulatory status of major stablecoins.
The new federal stablecoin law mandates 1:1 reserve backing and introduces a national licensing option, fundamentally altering the payment service compliance architecture.
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