US stablecoin issuers would have to pay redemptions within two business days under a Federal Reserve proposal now open for comment, but the largest holders of those tokens sit outside the rule’s direct reach.
The proposal, part of the first rulemaking wave under the GENIUS Act passed last year, sets reserve requirements and deadlines for issuers. Stablecoins are the settlement layer for most crypto trading, and holders redeem them for dollars theoretically at any time. The Fed’s rule would guarantee that right within two business days for regulated issuers, an improvement over the informal arrangements that have governed Stablecoins until now.
That figure, at $76 billion, matters because it captures where the money sits in practice. Exchanges hold stablecoins as trading collateral and float settlement between users. The Fed’s two-day clock binds issuers, not exchanges. An exchange holding a user’s stablecoin balance could not necessarily pay out within the Fed’s deadline, since the exchange is an intermediary rather than the issuer of record. The Fed’s proposal essentially guarantees the issuer’s ability to honor the peg at the issuer level, without touching how exchanges manage their reserves on hand.
The $291 Billion Market Behind It
Stablecoins are a market of roughly $291 billion, CoinGabbar’s October market outlook noted. Tether’s USDT accounts for the largest share, with Circle’s USDC second. The market grew steadily through 2025 and 2026 as payment use cases and exchange flows expanded. That growth is exactly what the GENIUS Act targeted, calling for full reserve backing in short-dated Treasury bills and similar liquid assets, with monthly attestation, a change from the uneven reserve reporting issuers have used until now.
Banks enter as issuers under the new rules, and the Fed’s proposal covers how banks would satisfy the reserve requirements. The Fed has also proposed customer identification requirements in the stablecoin space, and the SEC’s Hester Peirce argued in late September that compliance-focused KYC rules could create a new honeypot of personal data, describing five-year customer-record requirements as an unnecessary risk surface that stablecoin rules were about to amplify.
“The Fed’s two-day redemption clock would not govern the $76 billion in stablecoins held on exchanges.”
– CryptoSlate, September 29, 2026
The Depeg Risk in Practice
Redemption guarantees reduce one kind of fragility, the risk that a rush of holders cannot get out at $1. They do not reduce another, the risk that a stablecoin’s reserve composition or accounting betrays the peg, the way USDC briefly did in March 2023 when Silicon Valley Bank’s failure left Circle holding cash that was inaccessible. The GENIUS Act reserve requirements, short-dated Treasuries held at custodial banks, with monthly attestations, are designed to make a repeat of that episode unlikely. Peirce’s concerns about KYC data hoards touch a different vulnerability, privacy and security of user identity records, one that regulators have not settled into a single approach.
The broader market context for the proposal is a stablecoin ecosystem that has ballooned without a common rulebook, leaving banks and other institutions to hold stablecoins under ad hoc capital treatment. That changed this summer when Canada’s central bank, and then banks across Europe, moved to the first legal standards for stablecoin exposure. The Fed’s rule is the last piece of that puzzle for the US, and it lands on a market that has proved both large and resistant to runs in the recent cycle.
How it Feeds Into Congress’s Clarity Fracas
The stablecoin rule also marks where US crypto policy lands after months of legislative drift. The CLARITY Act, the market-structure bill meant to draw the line between the SEC’s and CFTC’s jurisdiction, failed to move through the Senate this fall, redirecting the rulemaking effort into agency hands. The CFTC filed market-structure proposals of its own on September 17, and the SEC opened trading in tokenized stocks on the same day. The Fed’s stablecoin rule joins that pattern: agencies acting where Congress has not.
TechTicker, a German-language outlet, put the drift plainly in its own coverage, noting that with the CLARITY Act stalled, the supervisory agencies are now writing the rules. The Fed is the last of the three agencies to publish its own crypto rule under this pattern, and, as with the CFTC and SEC texts, it goes out for public comment before anything final lands. The comment period and any final rule would come as the first operational test for GENIUS Act implementation.
The other Republicans on the committee did not endorse the Fed’s proposal, and committee Democrats signaled their reservations about tying stablecoin rules to policy disputes. The proposal’s meaning in the aggregation of stablecoin regulation is bigger than any one committee’s position, since GENIUS remains law and the Fed has to fill the gaps regardless of what senators prefer. The comment period will be the firstStructured opportunity for stablecoin issuers, banks and exchanges to argue over thresholds, disclosures and the definition of qualifying reserves.
The other question is enforcement. The Fed has not yet signaled how it will treat issuers that miss the two-day deadline, and the penalty structure for reserve shortfalls has not been set. The GENIUS Act left those details to regulators. The comment period and any final rule will supply those details, either by specifying penalties or by deferring them to the banking agencies’ general enforcement authority. For now the rule’s most concrete effect is the guarantee itself: regulated issuers who pay late are out of compliance, visibly, and the two-day guarantee gives exchange users a statutory claim for the first time.