What Is the Role of a Prime Broker in Managing a Stablecoin’s Reserve Liquidity?

A prime broker is a financial institution that provides a suite of services to institutional clients, including custody, financing, and trade execution. For a stablecoin issuer, the prime broker manages the liquidity of the reserve portfolio.

They execute the purchase and sale of reserve assets (like T-Bills) and manage the cash flow from redemptions and minting. Their expertise in traditional financial markets ensures that the reserve assets are managed efficiently and can be quickly converted to cash when a run requires high liquidity.