Safe stablecoin backing does not guarantee redemption at par
Safe assets alone do not ensure stablecoins trade at par, Giuseppe Ferrero argues in Bank of Italy Occasional Paper No. 1069, published October 13, 2026. Redemption timing and access distinguish the EU, US and UK frameworks.
Backing is not convertibility
Ferrero separates holding central bank money from borrowing it, and optional access from mandatory backing.
Even fully reserve-backed tokens can trade below par when redemption is slow, uncertain or restricted to intermediaries.
The paper compares frameworks as of mid-2026 without endorsing one.
Under the EU's Markets in Crypto-Assets Regulation, non-bank e-money token issuers hold at least 30 percent in bank deposits, rising to 60 percent for significant tokens; redemption has no fixed execution deadline.
The US GENIUS Act requires one-to-one backing, permits Treasury bills maturing within 93 days and grants no automatic Federal Reserve account or credit access.
The Office of the Comptroller of the Currency proposes redemption within two business days.
Britain mandates the public anchor
The Bank of England's proposed systemic sterling regime requires at least 30 percent in unremunerated central bank deposits and permits up to 70 percent in government debt maturing within six months.
Launch-stage systemic issuers may temporarily hold up to 95 percent in gilts.
An initial £40 billion issuance cap replaces proposed holder limits.
Every holder gets a direct claim, with redemption within 24 hours of a complete request, including identity checks and coin receipt.
A planned liquidity facility covers eligible, solvent and viable systemic issuers; design follows in 2027.
The exit route matters
The paper identifies redemption mechanics, not asset safety alone, as a remaining source of fragility.
Direct backing reduces counterparty risk but raises questions about bank funding, reserve demand and the public-private boundary.
Central bank lending remains a separate decision involving credit risk and moral hazard.