Reserve Management Approach

Anchorpoint’s stablecoin reserve is designed to support full backing of its stablecoins in circulation through high-quality and highly liquid reserve assets. The reserve is managed with a conservative objective: to preserve capital, maintain sufficient liquidity and support valid redemption requests in accordance with the applicable coin terms and conditions.

The reserve assets are segregated from Anchorpoint’s proprietary assets through a series of trust and custody arrangements with professional trustees and custodians. This structure ensures that the reserve assets backing each stablecoin are held and effectively managed for the benefit of the coin holders, subject to the applicable trust and custody arrangements.

Anchorpoint may hold reserve assets in cash, short-term bank deposits, marketable debt securities, eligible repurchase or reverse repurchase arrangements and dedicated reserve investment funds. These assets must meet strict eligibility requirements. Bank deposits must have a term of no longer than three months, while marketable debt securities must generally be issued or guaranteed by qualifying governments, central banks, public sector entities, international organisations or multilateral development banks and have a residual maturity of no longer than one year. Any other type of reserve asset may only be included where permitted under applicable requirements and, where required, approved by the Hong Kong Monetary Authority (“HKMA”). Reserve assets are expected to be denominated in the reference currency of the relevant coin, unless otherwise permitted by applicable requirements or approved by the HKMA.

The allocation between cash and non-cash reserve assets is managed based on customer behaviour, redemption patterns, projected cash flows, market conditions and risk limits approved through Anchorpoint’s risk governance framework. The reserve is structured to balance immediate liquidity with prudent investment management. Cash serves as the first layer of liquidity and is used to meet day-to-day redemption needs. Non-cash high-quality liquid assets provide an additional liquidity layer, as they are selected for their ability to be converted into cash efficiently when required.

Governance over the reserve is clearly defined. Anchorpoint’s Treasury department is responsible for day-to-day management of the reserve including: portfolio monitoring, valuation, liquidity management and reporting. Anchorpoint’s Executive Risk Committee and Executive Committee oversee risk appetite, investment strategy, concentration limits and key reserve management decisions, while Anchorpoint’s Board provides oversight for material reserve-related matters.

Anchorpoint values the reserve portfolio on a daily basis. Anchorpoint’s Treasury department prepares valuation reports showing the composition of the reserve and the market value of each reserve asset position. These reports support internal monitoring, financial reporting, audit work, attestation processes and regulatory reporting where required.

Overall, Anchorpoint’s reserve is designed as a conservative liquidity portfolio. It combines cash for immediate redemption needs with carefully selected high-quality and highly liquid assets that can be converted into cash when required. The framework prioritizes full backing, capital preservation, liquidity, transparent valuation and strong governance, with the aim of maintaining confidence that valid redemption requests can be met in accordance with the applicable coin terms and conditions.