OCC draft would let stablecoin redemptions take seven days

The Office of the Comptroller of the Currency proposed a rule to let stablecoin issuers extend the time to process redemptions from two business days to seven calendar days when aggregate redemption requests in a 24‑hour period exceed 10% of outstanding supply. The extension would apply to issuers and entities acting on their behalf and would not cover secondary‑market trades.

Under the draft section 15.12, routine redemptions must be completed within two business days. If requests on any single day exceed the 10% threshold, an automatic seven‑day window would apply to outstanding and subsequent requests. During that window, earlier redemptions could occur only after the OCC determines they can proceed in an orderly, fair and transparent way or the agency rescinds the extension. The OCC could extend the period further for specified safety, stability or public‑interest reasons.

The proposal covers entities under OCC jurisdiction and excludes secondary‑market transactions from the redemption timetable. The measure appeared on the OCC’s proposed‑issuance schedule in September, with a March 2 opening and a May 1 comment deadline; it did not appear on the agency’s 2026 final‑issuance list.

A Federal Reserve staff note dated Sept. 4 described a key operational distinction the proposal reflects: blockchain token transfers can move round‑the‑clock, while converting tokens into bank‑deposit dollars follows payment‑system timelines and bank procedures. The note described redemption timeframes as unsettled and treated token transfers and dollar conversion as separate functions.

Market practice shows how that separation can affect customers. When a holder receives bank dollars before an issuer completes redemption, a buyer or conversion provider has advanced cash to fund the exit. The provider pays the departing holder and keeps the token, then must resell, hold, or redeem that token later. If the provider has available cash and counterparties, it can continue offering conversions and customers may see bank funds before the issuer sells reserves. If the provider lacks funding or buyers, payouts can slow and fees or prices can change.

Issuer and platform terms shape access to direct redemption. One stablecoin issuer requires an eligible issuer account for redemption, making token ownership a conditional route to issuer redemptions for some holders. A major exchange’s instant‑cashout service allows U.S. customers to withdraw to eligible U.S. bank accounts via Real Time Payments, with a $100,000 per‑transaction cap and typical settlement in about 30 minutes but up to 24 hours depending on the receiving bank or card provider.

The OCC draft would allow issuers to use qualifying Treasury‑bill repurchase agreements as a liquidity source for redemptions. Regulators note that permission to borrow does not guarantee an available counterparty or remove the conditions that govern early redemptions during a seven‑day extension.

Whether a holder receives spendable bank dollars before an issuer redeems depends on a conversion provider’s available cash, willingness to fund an early exit, eligibility rules, transaction size limits and payment‑rail settlement times. Reserve backing and fast token transfers do not by themselves produce immediately spendable bank funds.