Stablecoins, RWA & Tokenization

What is reserve backing for a stablecoin?

Reserve backing is the pool of assets a stablecoin issuer holds to support the value of its tokens and honor redemptions. For a fiat-backed stablecoin, this is typically cash and short-term instruments held so each token can be exchanged for its reference value. The quality and liquidity of these reserves matter: holdings that are cash-like are easier to redeem under stress than illiquid or risky assets. Reserve backing is what gives a peg credibility, which is why issuers publish attestations on their holdings.