The Board may issue a directive restricting a State issuer's activities
What the document says“the Board may impose such restrictions as the Board determines to be necessary to address such risk during such unusual and exigent circumstances, which may include limitations on redemptions of payment stablecoins, and which shall be issued in the form of a directive, with the effect of a cease and desist order that has become final”
Subsection (e)(1)(C). The power turns on reasonable cause to believe that continuing an activity is a serious risk to the financial safety, soundness or stability of the issuer. The directive runs to the issuer and any of its affiliates and limits transactions between the issuer, a holding company and their subsidiaries or affiliates, and activities that might create a serious risk that the liabilities of a holding company and its affiliates may be imposed on the issuer.
What the document actually says“the Board may impose such restrictions as the Board determines to be necessary to address such risk during such unusual and exigent circumstances, which may include limitations on redemptions of payment stablecoins, and which shall be issued in the form of a directive, with the effect of a cease and desist order that has become final”
The Fed may set limits to deal with the risk. It may even cap how many coins are handed back. The order counts as a final one.
A limit on redemptions means holders may not get their money at once. The order can also cut off deals between the maker and firms tied to it.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.