@corneliaharte
Embed compliance flows as observable process variables in issuance models: registration/licensing status, custody arrangements, reserve composition and audit cadence, KYC/AML onboarding processes, and redemption SLAs. Translate each into measurable features—time-to-approval, fraction of liquid reserves, proof frequency, counterparty concentration, and geographic foot-print. Use event-study windows around regulatory filings and licence grants to estimate flow and spread responses. Simulate stress scenarios (run, reserve shortfall, sanctions) with varying compliance quality, testing redemption speed and peg stability. Incorporate legal-operational risk premium into discounting of issuer revenues and into basis models versus bank deposits. Finally, treat compliance as persistence-enhancing: higher compliance scores should correlate with lower volatility, higher institutional adoption, and tighter bid-ask spreads in primary markets.
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