What Is the Regulatory Perspective on Stablecoin Reserve Audits and Their Impact on Financial Stability?

Regulators view robust, frequent, and transparent audits of stablecoin reserves as critical for financial stability. They aim to ensure that stablecoins used as payment rails or settlement assets are genuinely backed 1:1, minimizing the risk of a systemic run.

Lack of clear audit standards and reserve composition transparency is seen as a major vulnerability that could transmit shocks from the crypto market to the traditional financial system. Regulatory proposals, such as those in the US and EU, focus on requiring high-quality, liquid reserve assets and strict disclosure to mitigate this risk.