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While regulatory frameworks may not specify an exact frequency for these reserves, institutional investors who participate typically expect to see them on a monthly or quarterly basis as a baseline. Custody infrastructure should enable daily internal reconciliation of reserves, so periodic reserve attestations can be created easily without having to tackle significant data backlogs.
Yes, however, doing so amounts to more than just operational risk; it unnecessarily complicates operational processes, which most issuers do not adequately consider during the planning phases of issuing a stablecoin. Multi-custodial structures require that all custodial locations have reconciled reserves in synchrony with one another, that they have clear protocols for splitting reserves among themselves, and that their custody infrastructure treats their several custodial locations as a single large pool for accounting and reporting purposes.
There is no single correct answer to this question; rather, it depends entirely on how reserves are being held. If the issuer’s reserves are held with regulated custodians in the names of the stablecoin holders, the holders may expect asset protection. If the reserves are being held in a commingled account, then stablecoin holders may have unsecured claims against the issuer. The custody architecture of your program will determine whether it can successfully utilise either method of dealing with failure.
You must ensure that the issuer’s reserves are maintained in genuinely liquid assets, and also ensure that the custody infrastructure can adequately process (without backlogs) the large redemption volume associated with the spike in redemptions during periods of market stress. If the custody system is sized only for ‘normal’ operational volumes, it will likely create significant order backlogs during periods of market stress, when the ability to process redemptions quickly is most critical to maintaining investor confidence in the stablecoin.
