SEC allows broker-dealers to count stablecoins as capital with 2% haircut

The U.S. Securities and Exchange Commission updated its Broker-Dealer Financial Responsibilities FAQ to permit broker-dealers to include qualified dollar-pegged stablecoins in net capital calculations with a 2% haircut (i.e., counting 98% of value). The guidance treats eligible stablecoins similarly to money market funds and requires issuer qualification criteria such as 1:1 high-quality asset backing, audited reserve reports, clear redemption rights and appropriate regulatory oversight. The informal FAQ change reduces earlier uncertainty when many firms applied a 100% haircut, and could free up billions in operational capital across firms involved in crypto trading, custody and settlement. Market participants — including industry groups and legal experts — welcomed the clarity, noting it may enable expanded custody, liquidity provision and tokenized securities activity. SEC Commissioner Hester Peirce said the move may broaden broker-dealer activity with tokenized assets. The guidance is informal (an FAQ update), so it can be modified or reversed; the SEC continues work on formal crypto rules and some industry players seek congressional legislation for permanence. For traders: expect increased stablecoin liquidity, lower opportunity costs for holding working capital in stablecoins, potential reduction in transaction costs and faster settlement, but remain aware of issuer solvency, concentration and cyber risks despite the qualification safeguards.