Proposed OCC Rules Could Extend Stablecoin Redemption to Seven Days

The OCC’s proposed Section 15.12 would set a standard redemption deadline of two business days after a holder’s request. If redemption requests exceed 10% of the total outstanding stablecoin supply in a 24‑hour period, the deadline would automatically extend to seven calendar days for that request and any subsequent ones.

How the Extension Works

During the seven‑day extension, an earlier redemption could only proceed if the OCC determines it can be done in an orderly, fair and transparent manner, or if the extension is lifted. The agency also reserves the right to extend the period for safety, stability or public‑interest reasons.

Impact on Holders and Conversion Providers

When a holder sells a stablecoin before the issuer redeems it, the cash comes from the buyer or a conversion service, not directly from the issuer’s reserves. The provider must then either hold the acquired tokens, resell them, or wait for issuer redemption. If the provider has sufficient liquidity, it can continue offering conversions even during the extension, making the delay largely invisible to the end user.

However, a longer redemption window may require providers to commit more cash to maintain payout pace, potentially affecting fees and quoted prices.

Specific Cases: USDC and Instant Cash‑Outs

Circle’s USDC terms for non‑EEA holders require an eligible Circle Mint account for direct redemption and guarantee one dollar per USDC, subject to fees and applicable law. The terms do not obligate third‑party platforms to quote a one‑to‑one price.

Platforms such as Coinbase offer “instant cash‑out” options that can move funds to a U.S. bank account within about 30 minutes, though delays of up to 24 hours are possible depending on the bank or card provider.

Reserve Liquidity vs. Market Liquidity

The proposal also allows issuers to use Treasury‑bill repo borrowing to support redemptions, adding a potential liquidity source beyond cash reserves. This does not guarantee that secondary‑market trading will continue unabated during a redemption surge.

Regulatory Timeline

The draft remains on the OCC’s proposed‑issuance list, with a comment period that closed on May 1. No final rule has been issued yet.