Fed Proposes Strict Stablecoin Rules, Requires 1:1 Reserves

The Federal Reserve has proposed rules for stablecoin issuers, which would require them to maintain 1:1 reserves and process redemptions within two business days.

Issuers would also need to provide regulators with weekly operating data and publish redemption policies explaining eligibility, procedures, and processing.

The draft would limit eligible reserves primarily to cash, Federal Reserve balances, qualifying bank deposits, U.S. Treasurys with no more than 93 days remaining to maturity, certain repurchase transactions, and specified money market funds.

Issuers would have to value those assets at least daily and ensure they cover the amount owed to stablecoin holders.