Fed Proposes Two-Day Stablecoin Redemptions for Supervised Issuers

The Federal Reserve has proposed new rules for stablecoin issuers to ensure customers can redeem their coins within two business days. The proposal, published on September 24 and announced on September 29, would apply to Board-supervised payment stablecoin issuers.

Researchers at the Andersen Institute for Finance and Economics found that $76 billion of reserve-backed dollar stablecoins were held in centralized exchanges as of July 28. This amount includes 12 different stablecoins, such as USDT and USDC, which are issued by various companies.

The proposed rule would require issuers to disclose their redemption procedures and explain how customers can redeem their coins. The issuer would also have to accept requests for at least one token, subject to screening and onboarding.

However, the proposal has limitations, including exceptions for safety, financial stability, or the public interest. The requirements are currently under public comment.