Stablecoin Holders May Face Longer Wait Times Under Proposed OCC Rules
The Office of the Comptroller of the Currency (OCC) has proposed a new framework for stablecoin redemption, which could lead to a longer wait time for holders to receive their cash. Under the proposal, issuers would have two business days to redeem tokens after receiving a request, but if demand exceeds 10% of outstanding issuance value in one day, the period would automatically extend to seven calendar days.
The extension would allow issuers to sell reserves in an orderly way, while still allowing secondary-market trading to continue. However, this could mean that holders would have to wait up to a week to receive their cash after selling or converting their tokens.
Circle's USDC terms for holders outside the European Economic Area also distinguish token ownership from direct redemption access, requiring an eligible Circle Mint account in good standing before holders can directly redeem their tokens.