Fed Proposed Two-Day Limit for Stablecoin Redemptions

New rules would mandate that supervised issuers honor redemption requests within two business days.

Updated on Sept. 29, 2026 in Investing

Isometric editorial illustration of a brass vault door with two interlocking geometric disks, symbolizing financial liquidity regulation. — The Federal Reserve Board has proposed new regulations requiring stablecoin issuers to honor investor redemption requests within two business days. AI Illustration. Upload story photo >

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Do you trust that new federal stablecoin regulations will effectively protect your digital asset holdings?

The Federal Reserve Board has proposed a regulation requiring supervised stablecoin issuers to disclose clear redemption procedures and limit the redemption period to two business days. The proposal aims to increase liquidity standards for the $76 billion in stablecoins currently held at centralized exchanges.

Why it matters

This rule intends to safeguard financial stability by ensuring that holders can access their funds during market stress, such as when USDC supply at exchanges dropped by $4.9 billion during a 2023 episode. The Federal Reserve Board maintains authority to extend this timeline if necessary to protect the public interest.

As of July 28, 2026, researchers tracked $76 billion in stablecoins at centralized exchanges, including $61.5 billion in USDT and $10.1 billion in USDC. These figures are compared against supply trends like the March 2023 USDC stress episode where exchange-held supply fell by $4.9 billion.

The players

Federal Reserve Board

The central banking system of the United States that oversees monetary policy and establishes safety regulations for financial issuers.

Tether

A major issuer of USDT stablecoins that requires customers to maintain a $100,000 minimum for direct redemptions.

Circle

The entity responsible for USDC stablecoins that requires holders to maintain a specific Mint account for direct redemptions.

The details

Under the proposed section 247.12, issuers would be required to accept and process redemption requests within two business days. Currently, direct redemptions often involve significant barriers, such as Tether's $100,000 minimum for verified customers or Circle's requirement for a specific Mint account. To access these direct channels, exchange customers must first instruct their trading venue to release or convert their balance before the issuer can process the redemption.

March 9, 2023: Baseline for the USDC stress episode study.
March 10-13, 2023: USDC supply fell by $2.7 billion.
July 28, 2026: Researchers conducted a snapshot of exchange balances.
September 24, 2026: The Federal Reserve Board announced the proposal.
September 29, 2026: The proposal was published in the Federal Register.

Money Landscape

This proposal follows a pattern set by established oversight frameworks that govern transaction clearing times for financial assets. It marks an extension of regulatory scrutiny toward crypto-assets to align them more closely with the safety standards of traditional banking systems.

If you hold stablecoins on a centralized exchange, this proposal may eventually streamline how you access your funds during periods of market volatility. Consider reviewing your exchange's current withdrawal policies and consult with a qualified financial professional regarding your liquidity needs.

The takeaway

The proposed two-day limit aims to standardize redemption windows for stablecoin holders during times of potential liquidity stress. Investors should keep track of the public comment period to see how future compliance requirements might impact their ability to trade or redeem holdings at centralized exchanges.