# Green assets as collaterals for stable coins **URL:** \ **Category:** Climate and ReFi\ **Created:** [June 1, 2022, 7:03pm UTC](https://forum.celo.org/t/green-assets-as-collaterals-for-stable-coins/3709 "2022-06-01T19:03:42Z")\ **Posts on this page:** 1\ **Showing post:** 7
**Author:** ![markbarendt](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.celo.org/markbarendt/32/6778_2.png) [@markbarendt](https://forum.celo.org/u/markbarendt)\ **Post date:** [June 2, 2022, 2:52pm UTC](https://forum.celo.org/t/green-assets-as-collaterals-for-stable-coins/3709/7 "2022-06-02T14:52:09Z")
Morning @untangled-finance I believe in your mission and the motivation, but the reserve isn’t idle capital. The reserve is essentially ‘money that is held in trust’ to protect the value of and provide liquidity for the Celo stable coins. Each cUSD, cEUR, cREAL coin is essentially a debt that Celo owes to the holders of those coins. The reason for over-collateralization is that all crypto assets are risky, even stable coins. The holders of Celo stable coins can demand payment of that debt at any moment and the reserve needs to be able to liquidate every single coin in short order if needed to pay all those debts. Now, there are ways to make the reserve less risky, which in turn could reduce the need for over-collateralization, and that could allow for money to be reallocated out the reserve and put to use elsewhere. Reducing the reserves risks is the key to being able to use that money for less liquid projects. That faces some real regulatory and philosophical challenges. Here’s one place where that is being talked about, there are other places too. > [@Reserve mandate: 1:1 stable value asset basket](https://forum.celo.org/t/reserve-mandate-1-1-stable-value-asset-basket/3663): > > Hi all, the [CGP to increase the stable value part of the reserve](https://celo.stake.id/#/proposal/56) has passed and the reserve is already approaching the 30% DAI target with, as of May 25th, more than 75M DAI (roughly 27% of the reserve) in reserve custody. This allocation implies that more than 70% of all Mento stable assets are currently backed by DAI alone. When also accounting for the other reserve assets (BTC, ETC, CELO and cMCO2), the Mento reserve is at a 275% reserve collateralization ratio as of May 25th which leaves th… --- _[View the full topic](https://forum.celo.org/t/green-assets-as-collaterals-for-stable-coins/3709)._