Glossary
Reserve
Assets held to support redemption obligations.
Related guide: Stablecoin Reserves and Depeg Risk. Updated 2026-09-08.
Reserve in context
A reserve disclosure answers what backs an issuer's obligations. Read its asset list and reporting date together: a balance recorded last month does not tell you which assets are available for today's requests.
Important boundary
Reserve size is not the same as reserve liquidity or asset quality.
A 100% reserve ratio does not by itself establish immediate redemption access. It also does not tell you who owns the legal claim, whether assets are pledged elsewhere, or what the verification covered.
Worked example
A fully backed balance sheet with a cash timing gap
Imagine 1,000 tokens, each carrying a $1 redemption claim. The issuer reports $200 in cash and $800 in securities. For this exercise, assume the securities really are worth $800, there are no other liabilities, and they cannot settle into cash until tomorrow. Total reserve value is $1,000, or 100% of the token claims.
Now holders request $350 today. Immediately available cash covers $200, leaving a $150 timing gap. Nothing in these assumptions proves that assets are missing: the problem is when value can be delivered. A different exercise, where securities are worth only $650, would instead produce a $150 shortfall in total asset value.
When comparing two disclosures, record total assets, obligations, the valuation date, and immediately available funds separately. That separates a timing problem from a value problem instead of treating both as an unexplained failure of backing.
Continue in the guide
Reading a reserve claim without stopping at the headline
Read the complete applied scenarioKnowledge check
Check the distinction
In the example, requests rise to $450 while cash remains $200. What is the immediate cash gap, and does that establish insolvency?
The gap is $450 - $200 = $250. Under the stated assumptions, assets still equal the $1,000 obligations, so the cash gap alone does not establish insolvency. It shows a timing constraint.
Source trail
Check the source or calculation
Background on disclosures and redemption rights. The numerical examples on this page are our fictional exercises, not figures reported by the FSB.