Standard · RAES v1.1 · Published
Reserve Asset Eligibility Standard
One standard. Seven criteria. Applied uniformly to every digital asset proposed for the corporate balance sheet — including Bitcoin.
Doctrine
The Institute does not endorse asset classes. It adjudicates them. Reserve asset eligibility is a function of measurable properties — settlement assurance, supply integrity, custody maturity, regulatory clarity, counterparty diffusion, accounting stability, and auditability — not of market capitalization, narrative momentum, or institutional fashion.
RAES exists so that boards evaluating a non-Bitcoin proposal can document, in defensible language, why they did or did not approve it. The standard is asset-neutral in form. Its application is empirical. As of this version, only Bitcoin clears all seven criteria. The Institute will revise this finding when, and only when, the underlying evidence changes.
The Seven Criteria
Each criterion is a binary-eligible test scored 0–3. A reserve-eligible asset must score 3 on criteria 1, 2, 4, and 5, and no lower than 2 on the remainder.
Settlement assurance & finality
Probabilistic finality measurable, reversible only by quantifiable economic attack cost.
Issuance schedule & supply integrity
Monetary policy fixed in protocol, not amendable by a foundation, council, or upgrade vote.
Custody architecture maturity
Multiple SOC 2 / qualified custodians with independent audit, insurance, and key-ceremony precedent.
Regulatory clarity
Affirmative non-security determination by primary jurisdiction's market regulator.
Counterparty & validator concentration
No identifiable issuer; validator/miner set sufficiently diffuse to prevent capture or coercion.
Accounting treatment stability
Established FASB/IFRS treatment with predictable disclosure and impairment guidance.
Disclosure & auditability of network state
Holdings independently verifiable on-chain by any auditor without privileged access.
Comparative Adjudication
Scoring as of RAES v1.1. Findings are evidence-based and revisable through the standard's quarterly review cycle.
| Criterion | BTC | ETH | SOL | XRP |
|---|---|---|---|---|
| #1Settlement assurance & finality | 3 | 2 | 1 | 2 |
| #2Issuance schedule & supply integrity | 3 | 1 | 1 | 1 |
| #3Custody architecture maturity | 3 | 2 | 1 | 1 |
| #4Regulatory clarity | 3 | 1 | 0 | 2 |
| #5Counterparty & validator concentration | 3 | 2 | 1 | 0 |
| #6Accounting treatment stability | 3 | 2 | 1 | 1 |
| #7Disclosure & auditability of network state | 3 | 3 | 3 | 3 |
| Outcome | Eligible | Conditional / Watch | Not Eligible | Not Eligible |
Score legend — 3: Clears · 2: Partial · 1: Material gap · 0: Fails.
BTC
Bitcoin
- #1Probabilistic finality with the largest economic security budget on record.Bitcoin whitepaper §11Hashrate index
- #221M cap fixed in protocol; no governance body authorized to alter issuance.BIP 42 — supply capBitcoin Core consensus
- #3Mature qualified-custodian market (Coinbase Custody, Fidelity, BitGo, Anchorage) with insured cold storage.OCC Interpretive Letter 1170NYDFS qualified custodians
- #4Treated as a commodity by US CFTC; non-security in primary jurisdictions.CFTC v. McDonnell (BTC = commodity)SAB 122 (rescission of SAB 121)
- #5No issuer; mining set globally distributed across regulated jurisdictions.Cambridge Bitcoin mining map
- #6ASC 350-60 (FASB) provides fair-value treatment; IFRS guidance under IAS 38 stable.FASB ASC 350-60IFRS — IAS 38 staff paper
- #7All holdings publicly verifiable on-chain; reserves attestation standardized.Bitcoin block explorerProof-of-reserves protocol
ETH
Ethereum
- #1Proof-of-stake finality (~12.8 min); slashing economics still maturing under live conditions.Ethereum finality docsBeaconcha.in finality
- #2Issuance is governance-mutable via EIP process; supply trajectory has changed multiple times since 2015.EIP-1559 (issuance change)Ultrasound.money supply
- #3Custody available but staked-ETH liquidity, withdrawal queues, and slashing risk complicate balance-sheet accounting.Coinbase staking T&CsWithdrawal queue tracker
- #4SEC posture remains unresolved; spot ETH ETFs approved but staking treatment contested.SEC ETH ETF approval orderSEC v. Consensys (closed)
- #5Validator set concentration in a small number of staking pools (Lido and top three exchanges) exceeds prudential thresholds.Lido stake shareRated.network operator concentration
- #6Accounting workable but staking yield treatment lacks settled FASB guidance.FASB ASC 350-60 scopeBig Four staking yield guidance gap
- #7Fully on-chain and auditable.Etherscan
SOL
Solana
- #1Repeated network halts (multiple multi-hour outages 2022–2024) undermine settlement assurance.Solana outage historyHelius post-mortems
- #2Inflation schedule and tokenomics adjustable through Solana Foundation governance.SIMD-0096 (validator rewards)Inflation schedule docs
- #3Institutional custody available but depth and incident-response track record are limited.Coinbase Custody supported assets
- #4Named in active SEC enforcement actions as an unregistered security; classification unresolved.SEC v. Binance (SOL named)SEC v. Coinbase (SOL named)
- #5Validator set economics concentrated; high hardware bar reduces decentralization.Solana Nakamoto coefficientValidator hardware specs
- #6No settled accounting guidance for staking-rewarded reserve assets.FASB ASC 350-60 scope
- #7Fully on-chain and auditable.Solscan
XRP
XRP / Ripple
- #1Deterministic ledger close, but consensus relies on a curated Unique Node List.XRPL consensus protocolDefault UNL (ripple.com)
- #2Pre-mined supply with material issuer holdings (escrow releases controlled by Ripple Labs).Ripple escrow holdingsXRPL escrow account
- #3Limited institutional custody depth relative to BTC/ETH.BitGo XRP custody
- #4US court ruled programmatic sales non-security; institutional sales status remains contested.SEC v. Ripple — programmatic sales ruling
- #5Identifiable issuer (Ripple Labs) holds material supply and influences validator list — fails the non-issuer test.XRPL validator list (Ripple-operated)Ripple Q1 markets report
- #6Accounting precedent thin; impairment treatment unsettled.FASB ASC 350-60 scope
- #7Fully on-ledger and auditable.XRPScan
Adjudication Outcomes
Eligible Reserve Asset
Clears all seven criteria. Suitable for board-approved long-duration treasury allocation under RARTA. Currently: Bitcoin only.
Conditional / Watch
Material gaps on one or more criteria. Not recommended for reserve treatment. Tracked quarterly for material change. Currently: Ethereum.
Not Eligible
Fails one or more disqualifying criteria (typically settlement, supply, or counterparty). Currently: Solana, XRP.
Methodology & Versioning
Semantic versioning. RAES follows the same versioning discipline as RARTA, SRF, and BEOL. Major versions reflect changes to the criteria set; minor versions reflect re-scoring driven by new evidence.
Quarterly review. Findings are revisited each quarter against new regulatory rulings, network incidents, custody developments, and accounting guidance. Any score change is published in the Standards change log with cited sources.
Public comment. Working drafts are open to structured peer review through the Standards repository. Submissions citing material changes in evidence are evaluated on merit, not on advocacy.
RAES Changelog
Released versions and upcoming quarterly review notes. Score changes, evidence refreshes, and criterion-set revisions are tracked here with status and scope.
First adjudicated release establishing the seven-criteria test, comparative scoring matrix (BTC, ETH, SOL, XRP), and three eligibility outcomes.
- •Codified seven-criteria evidence test with 0–3 scoring legend.
- •Published comparative matrix with cited sources for every score.
- •Released CFO one-page summary and full appendix (evidence definitions + 12-question procurement FAQ).
- •Established outcomes: Eligible Reserve Asset, Conditional / Watch, Not Eligible. Only BTC currently clears.
Quarterly reviews follow the Standards Development Lifecycle. Submit evidence for consideration via the Standards peer-review channel.
CFO One-Page Summary
Single-page board-ready handout: bottom-line recommendation per asset, scoring matrix, and next steps. Designed for the audit committee packet.
Full Appendix — Evidence Definitions & FAQ
Full evidence requirements for each of the seven criteria, scoring legend, comparative matrix, and 12-question procurement FAQ.
Evaluating a Non-Bitcoin Reserve Proposal?
Boards reviewing ETH, SOL, XRP, or any other digital asset for treasury allocation can request a structured RAES adjudication. Output is a board-ready memorandum with cited evidence and an explicit eligibility finding.
Request an Adjudication