The Fed’s stablecoin plan asks whether a backed token can be redeemed
The Federal Reserve has put two parts of a US payment-stablecoin rulebook out for public comment. One September 24 proposal addresses reserves, capital, risk controls, safekeeping and redemption for issuers the Board supervises. A separate proposal addresses how an insured state member bank would seek approval for a subsidiary to issue payment stablecoins. Neither proposal is a final rule.
The distinction worth watching is between backing a token and getting money back for it. The Fed proposes that a Board-supervised issuer hold permitted reserve assets whose fair value equals or exceeds the value of outstanding coins at all times. It would also require those reserves to be segregated from the issuer's other assets. Those are asset-side safeguards. They do not, by themselves, describe how quickly a holder can turn a coin into money.
A proposed deadline for redemption
The draft rule's redemption section would require a Board-supervised issuer to provide clear instructions for redeeming coins. It proposes an outer limit of two business days after a redemption request, subject to the proposal's stated conditions and possible regulatory extensions. The Board is explicitly asking commenters whether that limit is appropriate. This is a proposed standard, not a promise that every stablecoin holder today can redeem on that schedule.
Governor Michael Barr supported the proposal while raising a further question: the final rule should make universal redemption rights clear, including under market stress. His point separates a reserve's reported value from the holder's practical ability to claim it. That separation matters when an issuer must process requests, manage liquidity and handle the rules that apply to customers. It does not establish that any named issuer is unable to pay.
The Fed also proposes standardized capital requirements for credit and operational risks. Capital and reserves serve different jobs: reserves back coins outstanding, while capital is meant to absorb losses and support the issuer's continuing operations. Treating the two as interchangeable would overstate what either measure proves.
What is still undecided
The release says comments close 60 days after the proposals appear in the Federal Register; it does not supply a fixed calendar deadline on the September 24 announcement. The details may change after comments. The proposals also cover a defined set of Board-supervised issuers and bank applicants, not every token or company in the crypto market.
For readers assessing a payment stablecoin, the measurable chain is issuance, eligible reserves, custody of those reserves, a usable redemption claim and actual settlement. The Fed's proposals address several links in that chain. Whether the final rules make the whole chain reliable—especially when many holders seek redemption at once—remains an open question.