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  • Writer's pictureадв. Светослав Григоров

Reserve of assets

Updated: Jun 13, 2023

Asset-references token issuers maintain a reserve of assets that they hold permanently. When offering two or more categories of tokens, a separate reserve applies to each of them. Governing bodies manage reserve assets and monitor the adequate creation and destruction of tokens.

The issuers apply mechanisms to stabilize the tokens, through the following procedures:

- contain the reference assets against which they seek to stabilize their value;

- describe the type and distribution of the asset reserve;

- risk assessment;

- creation and destruction of tokens;

- specifies whether the reserve assets are invested;

- the investment policy;

- buying tokens and redeeming a token in exchange for reserve assets.

An independent audit of reserve assets is appointed every 6 months.

Custody of reserve assets

Token issuers warrant regarding reserve assets:

- separation from own assets;

- lack of burden;

- holding by guardianship;

- quick access to them.

Reserve assets received in exchange for tokens are placed in custody up to 5 business days after issuance by a well-selected licensed crypto-asset service provider or credit institution. A written contract is signed.

Credit institutions hold fiat currencies in custody in a separate account opened in the name of the issuer. They ensure that all financial instruments are registered in separate accounts.

Crypto-asset service providers open a registry of positions owned by issuers to distinguish reserve assets.

Trustees take action to prevent conflicts of interest between issuers.

Investment of reserve assets

Token issuers can invest the reserve assets only in highly liquid financial instruments with minimal market and credit risk, as well as a negative effect on the price.

Rights to token issuers or reserve assets

Issuers shall implement procedures and policies regarding the rights of token holders to claim or redeem, which shall determine:

- the conditions and terms for exercising the rights;

- procedure for guaranteed redemption of tokens;

- the method of evaluation of token values;

- settlement conditions;

- fees for exercising the listed rights.

Token issuers or crypto-asset service providers do not pay interest for the period holders hold the tokens.

Regarding the reserve of assets, please contact us by going to contacts.

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