# Collateralization Ratio

The collateralization ratio represents the extent to which the issuer's reserves back the circulating FUSD tokens. A 100% collateralization ratio means that FinChain Bermuda Limited has sufficient reserves to redeem all FUSD tokens at a face value of $1, ensuring that each token is fully backed by the issuer's reserves. This ratio increases transparency and assuring users that the value of USDO is backed by real assets, thereby reducing risk and maintaining stability. The formula for calculating the collateralization ratio is as follows:

$$
collateralizationRatio=NetAssetValueOfIssuer
′
s(FinChain)Reserves/FUSDtokensinCirculation
$$

You can view the real-time collateralization rate of FUSD on the Transparency dashboard.

{% embed url="<https://fusd.finchain.global/#transparency>" %}


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