Federal Reserve proposes two-day redemption mandate for stablecoin issuers
CIE News ·
The Federal Reserve drafted guidance requiring supervised fiat-backed stablecoins to fulfill redemptions at $1.00 within two business days, though the rule excludes exchange balances.
The Federal Reserve has proposed draft supervisory guidance requiring regulated fiat-backed stablecoin issuers to process customer redemptions within a two business day window at a par value of $1.00. The draft measures intend to establish uniform liquidity standards for major issuers such as Tether and Circle, which manage substantial holdings of U.S. Treasury debt.
According to CoinMarketCap, the proposed mandate specifically applies to supervised issuers and leaves out an estimated $76 billion in stablecoins stored across centralized exchanges where withdrawal rules differ. The framework also excludes secondary off-chain assets held in unhosted accounts, prompting industry discussion regarding liquidity fragmentation during periods of market stress.
Regulators designed the liquidity mandates to ensure prompt redemptions without disrupting reserve holdings. While the standard aims to strengthen consumer safeguards for regulated tokens, access to rapid withdrawals remains dependent on platform terms for exchange-based users.