Original sourcenews.bitcoin.comAdditional: tftc.io
Summary
The Federal Reserve plans to set a strict framework for bank-issued payment stablecoins: every $1 of stablecoin must be backed by at least $1 of qualifying reserves, and redemption must be completed within two business days. If an issuer's capital falls below the minimum standard, the rule permits…
Key points
- The clause-level reserve, capital, and redemption-timeline provisions directly determine whether a stablecoin can truly maintain par redemption, making them key criteria for assessing issuer soundness.
- Mandatory liquidation and capital charges shift stablecoin risk from users back onto issuers' balance sheets, changing risk pricing across the industry.
- Reserves must be segregated and held in short-term Treasuries and similar assets, compressing issuers' yield space; smaller players or those with poor reserve structures face higher costs, and compliant stablecoins may concentrate further among large banks.
Editorial note
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