Definition ∞ A reserve asset audit is an independent examination and verification of the underlying assets held by an issuer to back a digital token, typically a stablecoin. This process confirms that the declared reserves accurately match the outstanding token supply, ensuring transparency and solvency. The audit provides external assurance regarding the stability and redeemability of the digital asset.
Context ∞ The demand for robust reserve asset audits has increased significantly following events that questioned the backing of certain stablecoins, making it a critical news topic. Regular and transparent audits are considered essential for building and maintaining user trust in asset-backed digital tokens. Discussions often focus on the methodology and frequency of these independent verifications.
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