Issuer redemption is the form of stablecoin redemption in which the holder returns tokens directly to the stablecoin issuer and receives the reference currency in return, normally one unit of currency for each token. The issuer destroys the returned tokens and pays the holder from the stablecoin reserves that back the coins in circulation.
The qualifier matters because most holders never deal with the issuer. They sell on an exchange or through a stablecoin off-ramp at the market price, which can drift slightly from face value. Direct redemption has usually been open only to onboarded customers of the issuer, often institutions that have passed identity checks and meet a minimum size, and it may carry a fee and take a business day or more. These customers keep the market price close to the peg: when the token trades below one dollar they buy it cheaply and redeem it with the issuer at par.
Regulation has moved toward making the right explicit. The European Union's MiCA regulation gives holders of e-money tokens a claim on the issuer and a right to redeem at par at any time, and the United States GENIUS Act requires issuers to publish a redemption policy.