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What are stablecoin reserves?
Stablecoin reserves are the assets an issuer holds to back the coins it has issued, so each can be redeemed for a fixed amount. In the US, the GENIUS Act of July 2025 requires a permitted payment stablecoin issuer to hold identifiable reserves on an at least 1-to-1 basis, from a fixed list of assets.
What it means for you
In the US, issuers under the Act must publish their reserve composition monthly, have it examined monthly by a registered public accounting firm, and disclose redemption procedures and all fees; they cannot pay holders interest or yield just for holding the coin. The Act takes effect 18 months after enactment or 120 days after final regulations, whichever is earlier.
A common mistake: “A stablecoin is like a bank deposit, so the government insures it.”
In fact: In the US, the GENIUS Act provides that payment stablecoins are not backed by the full faith and credit of the United States and are not subject to FDIC deposit insurance, and makes claiming otherwise unlawful.
How it works
Permitted reserves are US coins and currency or Federal Reserve balances; demand deposits at insured banks; Treasury bills, notes or bonds with 93 days or less to maturity; overnight repurchase and reverse repurchase agreements backed by Treasuries; government money market funds holding those assets; other similarly liquid federal government assets a regulator approves; and tokenized forms of these. Reserves generally cannot be pledged, rehypothecated or reused. The CEO and CFO certify each monthly report, with criminal penalties for a knowingly false certification. If an issuer becomes insolvent, holders' claims on the required reserves have priority over other claims.
Source: GENIUS Act, Public Law 119-27 (govinfo compilation) · checked 4 October 2026
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Educational content, not financial advice. Written by hand and checked against the source named above. Something wrong? Tell us and we reply within two business days.