miniming
48 posts
May 26, 2021
7:28 PM
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Fiduciary obligations. Stating it simply, a stablecoin issuer should (ideally) be viewed and thought of as a fiduciary on behalf of the users of the stablecoin that is issued by the entity. This entails an array of responsibilities, but as it connects directly to stablecoins there has to be a delineation between the reserves held to support the stablecoin itself, and the earnings that these reserves create. For example, if an entity does not – in fact – reserve every stablecoin on a 1:1 basis with U.S. dollars and instead uses short term credit equivalents, what is the appropriate allocation of those earnings?
With total assets in excess of $50 billion, the potential earnings on reserves can quickly become a material item. Clearly not every stablecoin operates at such scale, but the concept does not change. slot pg
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