Fed Proposes Two-Day Stablecoin Redemption Limit Amid $76 Billion Blockage

The Federal Reserve's proposed stablecoin regulation has set off a wave of concern for businesses that hold stablecoins as working capital. On September 29, 2026, the Fed announced its proposal to impose a two-business-day redemption limit on issuers it supervises.

This means that if a business holds stablecoins and needs to convert them into fiat currency, they will have to wait at least two business days for the issuer to process the request. The proposal does not address the $76 billion in stablecoins that remain blocked due to various issues such as insolvency proceedings or custodial controls.

The proposed rule is aimed at reducing the risk of stablecoins depegging from their underlying assets, but it has raised concerns for businesses that rely on fast and efficient conversion of stablecoins into fiat currency. The two-day limit may not be sufficient to meet the needs of businesses that require quick settlement, such as payroll or vendor payments.