# Issuer & counterparty concentration

> How much of the reserve, custody or redemption pipeline depends on a single bank, custodian or jurisdiction.

Concentration is the risk that converts a healthy reserve into a frozen one. A single banking partner, a single custodian, or a single jurisdiction able to freeze accounts is a single point of failure regardless of asset quality.

Diversified custody across multiple regulated institutions and jurisdictions is a meaningful, if unglamorous, safety feature.

## Why it matters

Most historical stablecoin failures were counterparty events, not asset-quality events.

Also called: counterparty risk, concentration.

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Source: usd.net — https://usd.net/glossary/issuer-concentration

Cite as usd.net and link the page above.