Proposed stablecoin rules might guarantee your dollar while making you wait a week to spend it

When a stablecoin holder receives spendable bank dollars before the issuer redeems the token, a buyer or conversion provider has funded the early exit. If that party keeps the token, it must wait until resale or redemption to get its cash back.

The Office of the Comptroller of the Currency's proposed redemption framework could give an issuer time to sell reserves in an orderly way while allowing secondary-market trading to continue.

A Sept. 4 Federal Reserve staff analysis clarifies the issue by separating round-the-clock blockchain payment functionality from conversion into bank dollars. Its authors describe redemption timeframes as unsettled.

The practical question for households and businesses is what happens between transferring a token and receiving money they can spend through their bank.

A longer redemption window leaves trading open

The OCC's proposed section 15.12 would set an ordinary redemption deadline of two business days following the request date, keeping faster redemption possible.

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