Fed floats two-business-day redemption rule for supervised stablecoins
The Federal Reserve proposed on September 24, 2026, that stablecoin issuers it oversees redeem tokens within two business days, subject to exceptions and public consultation. The draft, published in the Federal Register on September 29, implements the GENIUS Act and also requires reserves to cover circulating tokens at all times. Comments are open until November 30, 2026, and global stablecoin circulation stood at $307.1 billion as of October 5, according to DefiLlama.
The draft, issued after a September 24 proposal and published September 29, would apply to issuers under Federal Reserve supervision. Section 247.12 allows extra time for identity or sanctions checks, or delays outside an issuer's control, but not merely a surge in redemption requests. The Fed could also extend deadlines to protect an issuer's soundness, financial stability, or the public interest.
Reserve assets must equal at least the nominal value of tokens in circulation at all times. Eligible holdings include cash, Federal Reserve balances, short-dated Treasury securities, insured-bank deposits, and certain Treasury-backed investments. Capital requirements scale with issuance: 2% for the first $20 billion, 1.5% for the next $30 billion, then 1%. Comments close November 30, 2026.
If finalized, the proposal could affect stablecoin holders, issuers, banks, payment firms, and merchants. Faster redemption may strengthen confidence that tokens can be converted, while identity and sanctions checks could still delay some requests. Higher reserve and capital expectations may raise compliance and operating costs, which issuers could pass on through fees or reduced services. The consultation may also shape how dollar-backed tokens integrate with mainstream finance, though the rules would not yet cover every issuer or guarantee uniform outcomes globally.