Stablecoins: The Fed Proposes 2 Days for Redemption

The U.S. Federal Reserve (Fed) proposed on September 24, 2026, a redemption period of two business days for stablecoins issued by supervised entities. The proposal includes exceptions and remains subject to consultation. Therefore, this timeframe does not yet constitute a requirement applicable to all dollar-denominated stablecoins.

In Brief

• 2 business days: This is the timeframe proposed by the Fed for redeeming the stablecoins it supervises, with regulated exceptions.
• 100%: The reserves of the issuer should always be worth at least as much as its circulating tokens.
• $307.1 billion: This is the value of stablecoins in circulation worldwide as of October 5, 2026, according to DefiLlama.
• November 30, 2026: The public can comment on the Fed's proposal until this date.

The text published in the Federal Register on September 29 specifies the Fed's rules for stablecoins: redemption, reserves, and capital. It implements the GENIUS Act, the provisions of which Cointribune presented during the Senate voting stage. A second proposal organizes the approval of the concerned banking subsidiaries.

Stablecoins: Two Business Days According to the Fed, with Exceptions

A stablecoin aims to maintain a stable value relative to a reference asset, in this case, a currency. Its redemption consists of obtaining this value from the issuer. It differs from a sale on a platform, where the price depends on the market.

The proposal sets the normal timeframe at two business days after the date of the request. It targets redemption by the issuer or its representative, not exchanges between buyers and sellers. A quick transfer on a blockchain and a redemption in currency are two different operations.

Section 247.12, however, provides for exceptions. Identity or compliance checks may require additional time. A delay independent of the issuer may also be accepted, provided reasonable efforts are made to resolve it. A simple increase in the number of requests is not sufficient to justify this exception.

The Fed could extend the timeframe to protect the issuer's soundness, financial stability, or public interest.

The Reserves and Capital Required by the Fed for Stablecoins

The value of reserve assets should cover at least 100% of the nominal value of the circulating stablecoins at all times. For one billion dollars of issued tokens, this represents at least one billion dollars of eligible assets.

The Fed's memo cites cash in dollars and balances with the Fed. It accepts U.S. Treasury securities with a residual maturity of 93 days or less. Deposits with insured institutions and certain investments guaranteed by Treasury securities would be accepted. A deposit with an insured bank may exceed the insurance limit.

The capital would serve to absorb losses. The component related to the issuance volume would start at 2% on the first 20 billion dollars. It would drop to 1.5% on the next 30 billion, and then to 1% beyond that. This scale does not summarize the total requirement: certain off-reserve revenues, operational losses, and credit risks also come into play. The complete calculation is detailed in sections 247.15 to 247.18 of the proposal.

The prohibition of interest would also be targeted. The issuer could not compensate solely for the holding, use, or custody of its stablecoin. The text extends to certain arrangements with third parties, without prohibiting all paid services using stablecoins.

The Fed's Rules Do Not Cover All Stablecoin Issuers

The prudential rules described concern the authorized subsidiaries of state-chartered banks, members of the Fed, and whose deposits are insured. They extend to certain state-chartered deposit institutions that are uninsured and transition to the federal regime. A provision in the linked sales project would have a broader scope, covering all authorized issuers.

For other actors, the competent authority depends on their status. Two examples illustrate why the commercial name of the stablecoin is not sufficient. According to Tether's announcement on January 27, 2026, USA₮ is issued by Anchorage Digital Bank. This token intended for the U.S. market is distinct from USDT.

Circle announced on July 10 the final approval of its national trust bank by the OCC, the supervisor of national banks. The announcement first describes an asset custody activity, with reserve management contemplated later. It does not allow, on its own, to conclude that the issuance of USDC now falls under this bank.

The market far exceeds the sole perimeter of the Fed. According to DefiLlama, consulted on October 5, 2026, its capitalization reached approximately $307.1 billion. USDT accounted for $184 billion, and USDC $74.2 billion.

MiCA Guarantees a Right to Redemption Under a Different Framework

In the face of the Fed's project on stablecoins, the relevant European comparison concerns electronic money tokens, or EMTs, which refer to a single official currency. It does not indiscriminately extend to all crypto-assets classified as stablecoins.

Fed project; MiCA, Article 49 , Article 50 , Article 54 *. Consulted on October 5, 2026.

The European threshold of 30% does not constitute a global coverage rate of 30%. It concerns the distribution of funds. Additional requirements apply to electronic money institutions issuing significant EMTs, according to Article 58.

The $10 Billion Threshold Comes from the Law

The $10 billion threshold does not come from the Fed's rules on stablecoins, but from the law. The GENIUS Act opens a pathway for state supervision. It concerns issuers whose consolidated outstanding does not exceed $10 billion, if the local regime is certified. Transition and exemption mechanisms exist beyond the threshold.

The interim rule published by the Treasury on September 30 organizes the review of these certifications. It does not create this threshold. It came into effect on that day. However, the text conditions the acceptance of certifications on the administrative approval of the information collection.

The debates also focus on the effective protection of holders. Governor Michael Barr supports the Fed's proposal on stablecoins while calling for clarification on redemption rights. He criticizes the criterion that limits certain supervisory interventions to anti-money laundering failures deemed significant or systemic.

Stablecoins will only be stable if they can be reliably and quickly redeemed at par under various circumstances.
Michael Barr, Federal Reserve Governor, statement from September 24, 2026

The regulation of issuance accompanies a broader debate on the effects of stablecoins on monetary policy. Regarding the timeline, Jonathan Gould announced in August that the OCC plans to publish its final rule by November. This is an announced timeline, not a guaranteed adoption. The Fed's consultation on stablecoins will end on November 30, 2026. The GENIUS Act will come into effect no later than January 18, 2027. It may apply earlier, 120 days after the adoption of final federal rules. Some provisions have their own timelines.