Circle Seeks SEC Cash Treatment for Stablecoins
Circle has urged the US Securities and Exchange Commission (SEC) to align its proposed crypto rules with the GENIUS Act. It wants qualifying payment stablecoins treated as cash under Rule 302(b), including dollar denomination and corresponding accounting and customer-reserve treatment. Circle also says they should be eligible to settle token offerings without making stablecoin issuers liable for the fundraising company’s obligations.
The company is asking the SEC to cut the broker-dealer capital haircut on qualifying stablecoins from 2% to zero, subject to safeguards. A haircut reduces the value firms can count toward regulatory capital; SEC staff guidance issued in February allowed a 2% haircut. The proposal also includes exemptions for qualifying offerings of up to $5 million over four years or $75 million within 12 months, subject to disclosure requirements.
In an October 20 comment letter, Circle sought clearer boundaries for technical work on functional blockchain networks, including validator maintenance and technology roadmaps. It argues these activities should not automatically be considered essential managerial efforts. The filing is a request, not adopted policy. If accepted, the Circle stablecoin proposals could improve regulatory clarity and reduce the capital cost of holding qualifying stablecoins, but market effects depend on the SEC’s response. Separately, Hyperliquid Policy Center has called for clarity on airdrops, secondary trading, developer protections and automated buybacks.
Neutral
The news is a policy request rather than an adopted rule, so it does not immediately change stablecoin issuance, settlement or broker-dealer capital requirements. No specific cryptocurrency price is directly affected in the summaries, and there is no confirmed catalyst for an immediate price move. Traders may monitor SEC comments and any subsequent rulemaking, but short-term reactions are likely to be limited unless the agency signals support or rejects the proposals.
Over the longer term, treating qualifying payment stablecoins as cash and lowering their capital haircut could improve settlement utility and reduce costs for regulated firms. That could support broader use of compliant stablecoins and crypto fundraising. However, the impact would depend on final eligibility criteria, safeguards and implementation. Until policy changes are adopted, uncertainty remains, making a neutral price-impact assessment most appropriate.