1 week ago
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Key Takeaways
- The Fed proposal applies to a narrow issuer group.
- It addresses reserves, capital, custody and approvals.
- Governor Barr highlighted prompt redemption under stress.
- Onchain transfers do not guarantee instant cash access.
- Public feedback could still reshape the final rules.
On September 24, the Federal Reserve Board requested comment on two proposals for payment-stablecoin issuers it supervises under the GENIUS Act. The proposals are not final, and their scope is limited to issuers under the Board’s supervision.
A reserve is not a complete redemption system
A payment stablecoin may be fully backed and still face a practical problem: whether its reserve assets, custody arrangements and banking partners can meet redemption requests promptly under pressure.
That question goes beyond the composition of a reserve. A holder needs to know whether the assets are sufficiently liqui...
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