The Federal Reserve has proposed rules requiring supervised payment stablecoin issuers to notify the Fed within 24 hours of a reserve shortfall and begin liquidation by 5 p.m. the next business day if the gap is not closed, under 48 hours in most cases. The regulator allows issuers to continue minting new tokens during the rescue window to prevent a sudden issuance halt from becoming a visible on-chain distress signal that could accelerate a run. Pro-rata liquidation is designed to prevent early redeemers from shifting losses onto remaining holders. The Fed’s research on the March 2023 USDC depeg, when $3.3 billion in reserves were trapped at Silicon Valley Bank and the token fell to $0.86 on secondary markets, informed this proposal. The total stablecoin market stood at approximately $307.3 billion, with USDT at $183.7 billion and USDC at $76.4 billion.
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