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Why Proof of Reserves Is Critical for Stablecoin Security
Stablecoins have rapidly grown in visibility and popularity. These tokens, which are pegged in value to a fiat asset like USD, have seen significant institutional adoption and are the subject of the GENIUS Act, a crypto law passed in the U.S. in 2025. Liquidity and reserves are essential to the success of a stablecoin project, which needs to be able to exchange its token for fiat assets on demand. Proof of Reserves (PoR) is critical to demonstrate this capability and build trust with users. Most cryptocurrencies derive their value from supply and demand, selling for what someone is willing to pay for them. ... (full story)