Counterparty risk
The risk that the other side of an arrangement fails to do what it agreed to do.
For deposit-backed tokens the counterparty is the bank; for bill-backed tokens the counterparty is the issuing government; for custody it is the custodian.
Every asset page lists the counterparties that matter for that asset in its risk block.
Related terms
Sovereign risk
The risk that a government does not meet the obligations of the debt it has issued.
CustodianA firm whose business is holding assets for others, named in the documents and examined in the financial audit.
Bank depositMoney placed with a bank under an agreement that sets the rate, the term and the conditions for withdrawal.