Reserve asset rules are regulations dictating the types, quality, and quantity of assets that stablecoin issuers must hold to back their digital tokens. These rules ensure that stablecoins maintain their peg to a reference value. They typically specify requirements for liquidity, diversification, and independent auditing of reserves.
Context
Reserve asset rules are a central focus of stablecoin regulation, particularly under frameworks like the EU’s MiCA. News often highlights discussions about the composition and transparency of stablecoin reserves following past market volatility events. Strict adherence to these rules is crucial for maintaining confidence in stablecoins and mitigating potential financial instability.
ADGM's formal ban on privacy tokens and algorithmic stablecoins establishes a clear jurisdictional boundary, mandating immediate VASP compliance system updates and product delistings.
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