DIGITAL MONEY AND TOKENIZED ASSETS

Reserve Asset

The assets—typically high-quality liquid instruments such as U.S. Treasuries or cash deposits—held by a stablecoin issuer to back the value of outstanding tokens. Reserve composition, auditability, and segregation are central to stablecoin regulation.

EXAMPLE

Proposed U.S. stablecoin legislation would require 1:1 reserve backing in cash or short-term Treasuries, with monthly third-party attestations published on-chain.

Relevant Roles and Functions

On-chain Role
Digital Asset Markets
Head of Tokenization
Function
Digital Securities Infrastructure
Tokenized Bond
Tokenized Funds
Tokenized Treasuries
TradFi Equivalent
Asset Servicing / Custody
Capital Markets
Securities Issuance
Structured Products

Related Terms

Stablecoin

A digital token designed to maintain a stable value, typically pegged 1:1 to a fiat currency and backed by reserve assets or algorithmic mechanisms. Unlike tokenized deposits, stablecoins are generally issued outside the regulated banking system.

Example

Circle's USDC stablecoin settled over $400B in adjusted on-chain transactions in 2025, increasingly used by institutions for treasury and cross-border payments.

Tokenized Deposit

A bank-issued, blockchain-based representation of a commercial bank deposit that moves on distributed ledger infrastructure while remaining a liability of the issuing bank—distinct from a stablecoin, which is typically issued by a non-bank entity.

Example

Citi's tokenized deposit pilot allows corporate clients to move cash between subsidiaries in real time on a permissioned ledger, with the same credit standing as a traditional deposit.

Regulatory Reporting

The obligation to submit transaction data, positions, and risk exposures to regulators. On-chain activity can streamline reporting by making ledger data directly auditable, though it also raises new questions about jurisdiction and data access.

Example

An immutable on-chain trade record could replace post-trade reporting to DTCC, giving the SEC real-time visibility into institutional digital asset positions.