Stablecoin Glossary
Custodian Bank
A custodian bank is a financial institution responsible for holding reserve assets on behalf of a stablecoin issuer.
Explanation
Stablecoin issuers often rely on regulated banks to safeguard fiat reserves backing their tokens. These custodial arrangements ensure that reserve assets are stored securely and separated from operational accounts.
Why it matters
Reliable custodial arrangements are essential for protecting stablecoin reserves and maintaining market confidence.
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