Fed Proposes Two-Day Stablecoin Redemption Limit, While $76B Remains Locked on Exchanges

The Federal Reserve has proposed a rule requiring payment stablecoin issuers under its supervision to process redemption requests within two business days. While the proposal aims to streamline liquidity, researchers at the Andersen Institute for Finance and Economics noted that $76 billion in stablecoins are currently held on centralized exchanges as of July 28. Because exchange customers must navigate platform-specific terms before reaching an issuer, the proposed redemption timeline may not directly apply to retail users. The rule, published in the Federal Register on Sept. 29, includes provisions for extensions based on safety or financial stability concerns and remains open for public comment.