Stablecoins: reserves, audit and transparency

A stablecoin is worth exactly as much as the promise that backs it: that behind every token there is a real value, available and verifiable. The difference between a credible project and a fragile one lies not in the marketing, but in three concrete elements: how the reserve is composed, how it is verified and how transparent it is towards holders. Here is what to look at and how to set it up.

The reserve: what really lies behind the token

“Pegged to the franc” or “to the dollar” says nothing in itself. What counts is what backs the peg.

Stablecoins backed by cash and liquid assets: the reserve is made up of cash and low-risk, highly liquid instruments. The quality depends on the actual composition: cash, deposits, short-term government bonds, and in what proportion.
Stablecoins backed by other crypto-assets: the backing is in volatile assets, typically with over-collateralisation to absorb the swings.
Algorithmic models: the peg rests on market mechanisms rather than a full reserve; these are the most exposed to a break of the peg.

The right questions: is the reserve full (one token, one unit of value as backing)? Are the assets liquid and available for redemption? Are they segregated from the issuer’s own assets, so as not to be reachable by its creditors?

The custody of the reserve

Even a well-composed reserve can be a risk if poorly held. What matters: where the assets are deposited (solid banks and counterparties), how they are protected from being commingled with the issuer’s assets, and with what redemption right the holder can recover the value. Asset segregation is what distinguishes a collateralised token from a mere promise.

Audit and attestation: they are not the same thing

This is where most of the confusion concentrates.

An attestation is a confirmation, at a given date, that the reserve exists and is of a certain amount. It captures a moment, following an agreed procedure.
An audit is a broader and more structured examination of the accounts and controls, with a higher level of assurance.

A serious project is clear about what is verified, by whom (an independent auditor, not a self-certification), with what frequency and with what level of assurance. A quarterly attestation is better than nothing, but it is not equivalent to a full audit: confusing the two is misleading for the holder.

Transparency: verifiable, not declared

Credible transparency is verifiable by third parties, not entrusted to press releases. The elements that make it real:

periodic publication of the composition of the reserve, not just the total;
accessible and dated independent reports;
clarity on the redemption mechanism and on who is entitled to exercise it;
information on the risks (counterparty, liquidity, custody), without minimising them.

The practical question for the holder: can I, using public documents, reconstruct where the assets are and who verified them? If the answer is no, the transparency is merely declared.

The Swiss regulatory framework

Issuing a stablecoin in Switzerland touches on relevant regulatory dimensions: depending on the structure it may constitute a public deposit, an activity subject to authorisation or anti-money-laundering obligations, and the redemption right affects the classification. The framework must be defined before issuance: the legal structure of the reserve and of holders’ rights determines the applicable regime, and it is not easily corrected after placement.

The correct sequence

First you define the backing model and the holder’s rights; then the custody and segregation of the reserve; then the regime of independent verification and transparency; finally the overall regulatory classification. Issuing first and organising the reserves afterwards is the path that leads to crises of confidence.

How SIH ONE approaches the topic

SIH ONE handles structuring and advisory: setting up the reserve model and asset segregation, designing the redemption mechanism and governance, defining the verification and transparency regime, coordinating with independent auditors. Where activities subject to authorisation are needed — issuance, custody, regulated services — the regulated activities go through authorised partners. The goal is a stablecoin that is credible because it is verifiable, not because it is declared to be so.

This content is informational and does not constitute legal, accounting or regulatory advice. Every structure must be verified in the specific case.

Are you designing a stablecoin and want to set up reserves and transparency credibly? Let’s talk: structure, verification and governance, with authorised partners where needed.