The Fed Wants Stablecoin Reserves to Mature in 93 Days. Redemptions Get Two.

Every dollar of a stablecoin the Federal Reserve supervises will soon need a dollar of cash, insured bank deposits, or Treasury bills maturing in 93 days or less sitting behind it, under two rules the central bank proposed on September 24. The companion rule sets a two-business-day limit on how fast an issuer has to hand that dollar back when a customer asks for it.

The proposals apply only to stablecoin issuers the Fed already supervises, meaning bank holding companies and their subsidiaries that want to add stablecoin issuance to their business, not every dollar-pegged token on the market. Circle and other nonbank issuers pursuing a national trust charter fall under a separate track at the Office of the Comptroller of the Currency, which Comptroller Jonathan Gould has said his agency plans to finish by November.

The mechanics behind the two-day promise

The reserve requirement goes further than a simple one-to-one ratio. Qualifying assets are capped at instruments the Fed considers nearly as liquid as cash itself: US dollars, balances at Federal Reserve banks, certain insured deposits, Treasury bills with no more than 93 days left to maturity, and specific repurchase agreements backed by those bills. Longer-dated Treasuries, the kind that pay a better yield, would not qualify.

A duration mismatch the rule is built to avoid

Capping reserve maturity at 93 days while promising redemption within two business days is a liquidity match, not a coincidence. Conventional banks have failed before when the assets backing deposits took longer to sell than depositors were willing to wait, a mismatch regulators are visibly trying to design out of stablecoins from the start. The Fed's own proposal adds standardized capital requirements on top of the reserve rule, specifically for credit risk tied to uninsured deposits and undercollateralized reverse repurchase agreements, plus operational risk more broadly.

“Stablecoins will only be stable if they can be reliably and promptly redeemed at par in a range of conditions.”

Barr's statement, released alongside the proposal, backs the framework while flagging what it does not yet settle. He wrote that a proposed "significant or systemic" standard for anti-money-laundering compliance needs public input because it is unclear whether the threshold would let the Fed properly verify an issuer's programs, and he asked commenters to weigh in on interest-rate risk, foreign-currency risk, and how clearly the redemption right is written into each issuer's policy.

The fight over rewards that isn't over

The proposal also wades into a dispute that has been running since the GENIUS Act passed in 2025: whether a stablecoin issuer or its partners can pay something that functions like interest without calling it that. The Fed's language presumes that arrangements involving third parties, the kind of setup where an exchange rewards customers for holding a stablecoin, count as prohibited interest or yield, with a narrow carve-out closer to a credit-card rewards program than a savings rate. Banking trade groups including the Bank Policy Institute and the Consumer Bankers Association have argued for months that any yield-like reward risks pulling deposits out of the banking system and into stablecoin balances, deposits banks use to fund loans. Crypto platforms have pushed back on tighter limits. Neither side gets a final answer from this proposal, and both get 60 days to make their case before the comment window on both rules closes.

For a stablecoin holder, the immediate change is nothing. These are proposed rules, not final ones, and the issuers most people actually use, led by Tether and Circle, are not Fed-supervised banks and would be regulated through a different door. For banks weighing whether to enter the stablecoin business under the Fed's charter, the rules are now specific enough to model: a narrower menu of reserve assets, a capital charge, and a two-day clock they will have to prove they can meet before a regulator signs off.