CryptoSlate
Circle is asking the SEC to treat qualifying payment stablecoins like cash in securities fundraising, broker-dealer capital calculations and customer reserve accounts. Its proposals could remove a 2% capital haircut on eligible stablecoin holdings and create additional institutional uses for USDC, but the SEC has not approved the changes.
Why it matters
Circle's requests respond to the SEC's proposed Regulation Crypto Assets, which includes exemptions for certain offerings of up to $5 million over four years and $75 million annually, subject to disclosure and other requirements. Circle supports the framework and wants companies receiving qualifying stablecoins to be able to use the same procedures as those receiving conventional cash.
The company also argues that dollar stablecoins redeemable one-for-one should count at their dollar value, and that accepting them as payment should not automatically impose securities obligations on the tokens or their issuers. Circle points to the GENIUS Act's reserve, redemption and supervision standards, but those requirements do not settle how stablecoins are treated under separate securities rules. Its implementing rules are scheduled to take effect on Jan. 18, 2027.
Market impact
The capital proposal targets an SEC staff-guidance haircut of 2% on qualifying stablecoin positions held by broker-dealers for their own accounts. At a $1 billion position, that treatment reduces calculated net capital by $20 million. Removing the deduction could free up capital, though the benefit would depend on how much eligible inventory a firm holds. The current guidance is nonbinding, and further regulatory acceptance would be needed for a zero haircut.
Circle separately wants compliant payment stablecoins recognized as eligible assets for broker-dealer customer reserve accounts under Rule 15c3-3. SEC action on these requests could broaden USDC's role in traditional finance; until then, the proposed uses remain uncertain.
Frequently asked questions
-
What changes is Circle asking the SEC to make for stablecoins?
Circle wants qualifying payment stablecoins treated like cash in certain securities offerings, broker-dealer capital calculations and customer reserve accounts.
-
How does the 2% stablecoin haircut affect broker-dealers?
The haircut reduces the value recognized in net capital calculations. A qualifying $1 billion proprietary position would reduce calculated net capital by $20 million under the 2% treatment.
-
Would removing the haircut automatically free up capital for every broker?
No. The benefit would depend on how much eligible stablecoin inventory a broker holds, and further regulatory acceptance would be needed to establish a zero haircut.
-
What does Circle want changed for securities fundraising?
Circle wants companies receiving qualifying stablecoins in certain offerings to use the same procedures as companies receiving conventional cash, and wants redeemable dollar stablecoins valued at their dollar amount.
-
Does the GENIUS Act settle how stablecoins are treated under securities rules?
No. Its issuer requirements establish standards for areas including reserves and redemption, but do not automatically determine treatment under every securities rule.
CoinDesk
TheBlock
WatcherGuru
WuBlockchain
Crypto News