The Federal Reserve's stablecoin proposal would put a general two-business-day limit on redemption by issuers it supervises.

For a customer holding stablecoins at an exchange, the first step is getting that venue to release or convert the balance. In a July 28 snapshot, researchers located $76 billion of stablecoins at centralized exchanges, where a customer may have to deal with the venue before reaching an issuer.

Researchers at the Andersen Institute for Finance and Economics located that amount across 12 reserve-backed dollar stablecoins. They call the exchange figure a lower bound because some exchange wallets cannot be identified.

The Fed proposal , published in the Federal Register on Sept. 29 after the Board announced it on Sept. 24, would require a Board-supervised payment stablecoin issuer to disclose its redemption procedure.

Under proposed section 247.12, its normal period to redeem after a request could not exceed two business days. The issuer would have to explain how a customer can redeem and accept requests for at least one token, subject to screening and onboarding.

The Board could extend the period for safety, financial stability or the public interest. The proposal also includes limited safe harbors for delays tied to required customer checks or circumstances outside an issuer's control. The requirements remain under public comment.

If an exchange makes a qualifying redemption request to an issuer, that issuer's obligations could matter to the exchange. An exchange customer's instruction to sell, convert or withdraw a balance is a separate transaction with the venue. The venue's terms govern that customer-facing step.

Current terms show why the distinction matters. Circle says direct USDC redemption under its terms for holders outside the European Economic Area is available to an eligible holder with a Circle Mint account in good standing.