Federal Reserve Proposes Capital and Redemption Rules for Stablecoins
The Fed's new stability standards
On September 24, 2026, the US Federal Reserve released two draft rules to regulate stablecoins. These are digital currencies designed to maintain a fixed value, typically tied to the US dollar. The proposed rules establish specific financial requirements and reporting standards for companies that issue these tokens. This action is a step toward implementing the GENIUS Act, a recent US law that sets the broad legal framework for stablecoins.
The drafts also outline how banks could apply to issue stablecoins through specific company structures. The proposals are now open for public feedback.
Key requirements for issuers
- Capital Buffer: Companies holding stablecoins must keep a financial safety net. The requirement is 2% of the first $20 billion in circulating tokens, dropping to 1.5% for the next $30 billion, and 1% for any amount above $50 billion.
- Redemption Speed: Issuers generally must allow users to exchange their stablecoins for cash within two business days.
- Monthly Transparency: Companies must publish monthly reports detailing their stablecoin supply and the value of their financial reserves. These reports require a certification from the company's chief executive and finance officers.
- Reserves: The rules reinforce the GENIUS Act mandate that stablecoins be backed one-to-one by assets like cash and short-term US government debt.
Official statements on market stress
Fed Governor Michael Barr supported the proposal but emphasized that stablecoins must remain redeemable even during financial crises. He stated that these tokens are only truly stable if they can be exchanged at their face value during periods of market stress.
Barr raised specific concerns about interest-rate risks and foreign-currency risks. He also warned against a standard that would prevent the Fed from acting on money-laundering issues unless they are considered "significant or systemic."
Timeline for implementation
According to the GENIUS Act, the law will take effect on January 18, 2027. However, it could take effect earlier, 120 days after federal regulators finalize the specific rules, whichever happens first. The current proposals are in a 60-day public comment period.
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Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.