Fed Proposes Capital and Redemption Rules for Stablecoin Issuers

The Federal Reserve unveiled a proposal on capital and redemption rules for banks and companies that issue dollar stablecoins under its supervision, marking the first concrete step toward putting the GENIUS Act into daily market practice. The changes will hit issuers themselves hardest, along with traders who hold USDT and USDC as a working tool for exchanging into hryvnia or dollars.

Two Business Days to Redeem

The Fed opened two proposals for public comment at once. The first covers stablecoins whose issuers already fall under its supervision: they would have to process redemption requests within two business days, with no exceptions during periods of heavy demand. If reserves drop below a one-to-one match with outstanding tokens, the issuer must notify the Fed and choose one of two paths: restore reserves under an agreed remediation plan, or liquidate assets and redeem the tokens still in circulation.

The second proposal lays out an application process for banks that want formal authorization to issue their own stablecoins, rather than simply plugging into existing issuers through partnership deals. Both documents will take public comments for 60 days after publication in the Federal Register.

Fed-supervised issuers will also have to publish monthly reports on outstanding token volume and reserve composition. A registered public accounting firm will audit those reports, and the issuer's CEO and CFO must personally certify them. That level of personal executive accountability was previously applied mostly to public companies, not to digital asset issuers.

What It Means for USDT and USDC Holders

Tighter redemption and reserve requirements raise the trust bar for dollar stablecoins broadly, even though the rule technically applies only to Fed-supervised issuers. Tether, the company behind USDT, is registered outside the US and doesn't fall under this specific proposal. Still, the rule sets a benchmark against which the market will measure every other player, including offshore ones.

The market has already seen what happens when the promise of instant redemption breaks down. In March 2023, USDC lost its dollar peg for several days after the collapse of Silicon Valley Bank, where part of Circle's reserves got stuck. That's precisely the kind of episode the new two-day redemption window is meant to prevent.

For users who regularly sell USDT for hryvnia through services like Kurslog, this is an indirect but tangible development. The stricter the redemption rules for regulated US issuers, the lower the risk of a sudden trust collapse in the dollar stablecoin traded daily on the local P2P market.

Banks Look for a Way Into Stablecoins

The application process gives banks a path to issue their own tokens under direct Fed supervision, instead of only connecting to existing issuers' infrastructure. That could dilute the position of Circle and today's other market leaders, since it adds players with cheaper capital and a ready-made base of corporate depositors.

Getting approval won't be quick, though. Banks will have to pass the same capital and reserve checks as specialized issuers, meaning months of work with lawyers and auditors before they even file an application. The first applicants will likely come from large banks with their own trust divisions rather than from regional players.

• New issuers could attract corporate clients uncomfortable holding digital assets outside the banking system.
• Demand for short-term government bonds as collateral may rise alongside the number of regulated issuers.
• Capital standards could prove too costly for smaller banks, so the first wave of applicants will likely be limited to a handful of the largest players.

Barr's Warnings on Enforcement

Fed Vice Chair for Supervision Michael Barr backed the proposal in Thursday's vote but flagged gaps he wants closed before the final rule.

"Stablecoins will only be stable if they can be reliably and promptly redeemed at par in a range of conditions. This includes during market stress, when pressure can be put on the value of even otherwise liquid government debt, and during episodes of strain on the individual issuer or its related entities."

- Michael Barr, Federal Reserve Vice Chair for Supervision, Fed statement, September 24, 2026

Barr also asked for universal redemption rights to be spelled out more clearly in the final rule. Separately, he raised concerns about a standard that limits the Fed's supervisory action against anti-money-laundering failures to cases deemed "significant or systemic." In his view, that wording leaves too much room for issuers to interpret the rule on their own terms.

What Comes Next

Over the next two months, the Fed will collect feedback from banks, issuers and lawyers before moving to a final rule. Don't expect a fast rollout: similar processes at the US regulator typically stretch across several rounds of public edits and follow-up consultations.

Still, the fact that the Fed finally laid out concrete deadlines and numbers (two days for redemption, monthly reporting, 60 days for comments) gives the stablecoin market a reference point it has lacked since the GENIUS Act was signed into law this spring. For a market growing faster than regulators can keep pace with, that alone counts as news.