On-Chain vs Off-Chain Stablecoin Reserves Explained
On-chain reserves are visible via blockchain data, while off-chain reserves rely on traditional custody and attestations.
Ronnie Huss
January 24, 2026
On-chain reserves are visible via blockchain data, while off-chain reserves rely on traditional custody and attestations.
A depegging event occurs when a stablecoin trades away from its intended reference value.
Proof of reserves is a method of demonstrating that assets exist at a specific point in time.
Yield-bearing stablecoins aren’t magic—they’re risk packaging. Here’s where yield comes from and what can break.
Fiat-backed stablecoins rely on off-chain assets, while crypto-backed stablecoins use on-chain collateral.
The UK and EU regulate stablecoins with similar objectives but different enforcement philosophies.
UK regulators assess stablecoins based on economic function, not technological design.
Custody is the stablecoin attack surface: who controls reserves, what happens in stress, and who gets paid first.
Stablecoin reserves are the assets backing a stablecoin’s value and enabling redemption at par.
A stablecoin issuer isn’t a logo—it’s a liability-bearing entity. Here’s what issuers do and what can go wrong.