Reserve

Definition ∞ A ‘reserve’ refers to assets held by an entity to meet its financial obligations or to back the value of a specific digital asset. For stablecoins, reserves are intended to maintain their peg to a reference currency, such as the U.S. dollar. The composition and transparency of these reserves are crucial for the stability and trustworthiness of the associated digital asset. Audits and attestations of reserves are closely scrutinized by the market.
Context ∞ The current context surrounding reserves for stablecoins is one of intense focus and regulatory examination. Following past controversies regarding reserve adequacy and composition, there is a strong push for greater transparency and stricter auditing standards. News often reports on the types of assets held in reserves, the frequency of attestations, and potential regulatory requirements for reserve management.