Stablecoin redemptions capped at two days, with notice due within 24 hours if demand exceeds 10%

Key Facts

The U.S. Office of the Comptroller of the Currency on October 21 announced a final rule governing stablecoin issuers, keeping the prompt redemption period at two business days. The rule covers authorized payment stablecoin issuers and foreign issuers subject to the office’s jurisdiction, as well as certain custody activities at entities it supervises. The time limit sets a uniform framework for processing redemption requests, while requiring regulatory notice in the event of a large and sudden increase in demand. The Federal Register published the rule on October 23, two days after the office announced it. The decision is part of the implementation of the GENIUS Act, which establishes a licensing and regulatory framework for the activity.

The two-day period begins after the issuer receives a redemption request and the applicable onboarding conditions and legal requirements are met. Redemption is considered complete for purposes of the deadline when the issuer has fully processed the request and begun transferring the funds to the customer or the customer’s financial institution. If the customer requests that the amount be credited to an account with the issuer, redemption is complete when the balance is added to that account. The rule does not require an external bank to make the funds available to the customer within the same period; it specifies what the issuer must complete before the end of two business days. This distinction gives customers and issuers a clearer standard for separating the issuer’s execution of the transfer from the time funds arrive through another financial institution.

The rule requires an issuer to notify the Office of the Comptroller of the Currency through its supervisory office within 24 hours if redemption requests exceed 10% of the outstanding issuance value for any brand it issues during a single 24-hour period. This means the threshold is measured at the brand level, not against the issuer’s total issuance, as stated in the initial proposal. The requirement places large waves of requests on a defined, time-bound regulatory notification track. The office chose to require reporting of a sudden increase rather than retain an automatic extension of the deadline. The rule did not state that this notice prevents an issuer from delaying redemption in every circumstance; the office may impose an extension in specified cases.

The office removed from the final rule the automatic extension included in the proposal, saying it could be “procyclical and could trigger or exacerbate runs.” The proposal would have allowed the redemption period to be extended automatically, but the office concluded that lengthening the wait as demand rises could increase pressure rather than contain it. It therefore kept the two-day cap as the basis for timely redemption and adopted rapid notification when the demand threshold is exceeded. This does not remove the office’s authority to impose an extension under specified circumstances in accordance with the rule. The regulatory balance here rests on a known deadline for redeemers and an early signal to supervisors when demand accelerates.

The legislative background dates to the GENIUS Act, enacted on July 18, 2025, to establish a supervisory and licensing framework for stablecoin activities and their issuers. The office preceded the final rule with a regulatory proposal on March 2, 2026, and then received about 328 comments from crypto-focused companies, trade groups, banks, nonprofit organizations, academics and individuals. In its announcement of the rule, the office said it would continue coordinating with other agencies responsible for implementing the law and overseeing the sector, and update the framework as needed as business practices evolve. The current rule excludes Bank Secrecy Act, anti-money laundering and sanctions requirements administered by the Office of Foreign Assets Control; those requirements will be considered in a separate rulemaking process in coordination with the Treasury Department. The volume of comments and range of participating groups place the decision within a broader regulatory process extending beyond redemption rules alone.

The law and rule take effect on January 18, 2027. Until then, the Office of the Comptroller of the Currency said it would announce in a separate statement when it will begin accepting exemption and licensing applications from entities seeking to become authorized issuers. The office also said it is not accepting these applications yet and will begin receiving them after obtaining final approval to collect the information included in the application forms. The regulatory timetable thus separates the effective date of the requirements from the start of licensing procedures. Setting the acceptance date later is among the implementation steps prospective applicants are awaiting.