The Federal Reserve has outlined a rule that would impose a two-business-day maximum on redemption periods for stablecoin issuers under its supervision. The proposal, published in the Federal Register on September 29 following an announcement on September 24, requires regulated issuers to disclose redemption procedures and adhere to a standard two-day window for fulfilling customer requests. The Board may extend this period only for safety, financial stability or public interest reasons, and would grant limited safe harbors for delays caused by mandatory customer checks or factors beyond an issuer's control. The rule remains under public comment and does not yet apply to all stablecoin activity.

Researchers at the Andersen Institute for Finance and Economics identified approximately $76 billion in reserve-backed stablecoins held across centralized exchanges as of July 28. This figure represents a lower bound, as some exchange wallets could not be uniquely identified. The amount spans 12 reserve-backed dollar stablecoins, including $61.5 billion in USDT and $10.1 billion in USDC. The researchers noted that exchange-held balances differ from issuer-level redemption obligations, as customers must first engage with the exchange platform before accessing issuer redemption pathways.

Under current arrangements, redemption processes vary significantly by platform. Circle indicates that direct redemption of USDC outside the European Economic Area requires an eligible holder with a Circle Mint account in good standing. Coinbase's user agreement states that customers own their USDC balances but does not obligate the exchange to repurchase tokens for fiat currency, though it may do so at its discretion and directs users to Circle's terms for direct redemption. Both platforms reserve the right to suspend trading or transfers under certain conditions, and eligibility for redemption depends on account status and venue-specific policies.

The proposal's scope is limited to issuers directly supervised by the Federal Reserve Board, while the $76 billion exchange figure encompasses a broader range of stablecoin holdings and operational models. Analysts caution that comparing exchange balances with issuer redemption obligations requires case-by-case assessment, as different stablecoins may be governed by distinct eligibility rules and regulatory frameworks.

Historical data from the March 2023 USDC stress episode illustrate the complexity of interpreting exchange behavior. Researchers observed that exchanges held 15.2% of USDC supply before the shock but accounted for 40% of the subsequent supply decline. During the period from March 9 to 13, USDC supply fell by $2.7 billion while identified exchange balances rose by $600 million. In the following days, supply declined by an additional $8.1 billion and exchange balances dropped by $4.9 billion. This pattern suggests that token movements onto exchanges can coexist with shrinking overall supply, and that redemption dynamics may unfold differently across phases of market stress.

The Andersen snapshot highlights gaps in applying the proposed rule to current market conditions. While the Fed's framework would define redemption obligations for Board-supervised issuers, it does not address the full scale or structure of exchange-held reserves. Further evidence would be needed to assess how the rule might affect redemption timelines, customer access, and systemic risk across the broader stablecoin ecosystem.