Bankruptcy remoteness
Reserves & backingWhether reserve assets are legally segregated from the issuer's estate, so holders are paid ahead of general creditors if the issuer fails.
Segregation is a legal question, not a technical one. Reserves held in a bankruptcy-remote trust or a regulated custody structure sit outside the issuer's insolvency estate; reserves held on the issuer's own balance sheet do not.
Two tokens with identical reserve composition can rank very differently in a wind-down depending on this structure alone.
Why it matters
This determines your recovery position in the one scenario that actually costs you principal.
Related terms
Which regime the issuer operates under — for example EU MiCA e-money tokens, a NYDFS trust charter, or a Singapore/UAE licence — and the reserve, reporting and redemption duties that come with it.
What the issuer actually holds against outstanding tokens: T-bills, overnight repo, bank deposits, commercial paper, crypto collateral, or a mix.
How much of the reserve, custody or redemption pipeline depends on a single bank, custodian or jurisdiction.