The Federal Reserve has proposed a two-business-day limit on stablecoin redemptions by issuers it supervises, but the rule would not reach the $76 billion in stablecoins sitting at centralized exchanges. Getting that money out still depends on each exchange's own terms, not the Fed's clock.
The Fed's stablecoin proposal would force Board-supervised issuers to pay out redemptions fast. It would not touch a separate problem: exchanges, not issuers, hold the money first.
What the Fed proposal actually covers
Published in the Federal Register on Sept. 29 after the Board announced it on Sept. 24, the Fed proposal would require a Board-supervised payment stablecoin issuer to disclose its redemption procedure. Under proposed section 247.12, the normal redemption period could not exceed two business days, and the issuer must accept requests for at least one token, subject to screening and onboarding.
The Federal Reserve Board could extend that window for safety, financial stability or the public interest, and the proposal includes limited safe harbors for delays tied to required customer checks. The requirements remain under public comment.
Why exchange balances sit outside that clock
An Andersen Institute for Finance and Economics snapshot from July 28 found $76 billion, or 28.2% of $269.4 billion, across 12 reserve-backed dollar stablecoins sitting at identified centralized exchanges, a figure researchers call a lower bound since some exchange wallets cannot be identified. That total includes $61.5 billion of USDT and $10.1 billion of USDC at exchanges, plus other coins.
A customer must first get the exchange to release or convert a balance, a step governed by the venue's own terms rather than the issuer's redemption policy. Circle's direct USDC redemption for holders outside the European Economic Area requires an eligible Circle Mint account in good standing, and Coinbase's user agreement says it is not obliged to repurchase USDC for dollars even though customers own their wallet balance. Tether requires a verified customer for direct redemption and posts a $100,000 minimum.
What the 2023 USDC stress showed
Andersen researchers also traced venue balances during the March 2023 USDC stress episode. Using March 9 as the pre-shock baseline, exchanges held 15.2% of USDC supply but accounted for 40% of the subsequent supply decline.
From March 10 to 13, USDC supply fell $2.7 billion while identified exchange balances rose $600 million. After March 13, supply fell another $8.1 billion and exchange balances fell $4.9 billion. Treating the whole episode as an immediate exchange exodus would miss that later reversal.
Wallet-location data leave the order of individual exchange requests unknown, so how today's venue balances would move under a fresh shock stays untested.
Source: CryptoSlate
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