# Reserve composition

> What the issuer actually holds against outstanding tokens: T-bills, overnight repo, bank deposits, commercial paper, crypto collateral, or a mix.

Not all backing is equal. Short-dated Treasury bills and overnight reverse repo are liquid on a same-day basis. Uninsured bank deposits are a concentrated counterparty exposure — the 2023 depeg of a major US stablecoin was a deposit problem, not a Treasury problem.

Longer-duration or credit-sensitive holdings introduce mark-to-market risk exactly when redemptions spike.

Read the maturity ladder and the custodian list, not just the headline collateral percentage.

## Why it matters

Reserve quality determines whether the issuer can honour a redemption wave without selling at a loss.

Also called: backing, reserves.

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Source: usd.net — https://usd.net/glossary/reserve-composition

Cite as usd.net and link the page above.