Circle submits a comment letter to SEC proposing that compliant payment stablecoins be treated as “cash”
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AT A GLANCE
Circle proposes to SEC treat payment stablecoins compliant with the GENIUS Act as cash and reduce the haircut for broker-dealer holdings to zero.
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Circle submits comments to SEC a comment letter, proposing that compliant payment stablecoins be treated as “cash” and that the haircut for broker-dealer holdings be reduced to zero
PANews October 28 reported, according to Circle’s official blog, that Circle recently submitted a comment letter regarding the United States’SEC proposed Regulation Crypto Assets. Circle recommended that the rule align with the GENIUS Act, and requested that SEC clarify that payment stablecoins compliant with the GENIUS Act qualify as “cash” under proposed rule 302(b), are valued in USD, and receive corresponding accounting and customer reserve treatment. Circle also recommended reducing the haircut for broker-dealers holding such stablecoins to zero, provided objective safeguards are in place. In addition, Circle requested that 2%clarify that technical services after a network becomes operational, including maintaining a known validator set, do not constitute “essential managerial efforts,” and establish a safe harbor for technical roadmaps.
Circle recently submitted a comment letter regarding the United States’SEC proposed Regulation Crypto Assets.
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Circle recommended that payment stablecoins compliant with the GENIUS Act qualify as “cash” under proposed rule 302(b), be valued in USD, and receive corresponding accounting and customer reserve treatment.
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Circle recommended that, provided objective safeguards are in place, the haircut for broker-dealers holding such stablecoins be 2%reduced to zero.
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Circle also recommended clarifying that technical services after a network becomes operational do not constitute “essential managerial efforts,” and establishing a safe harbor for technical roadmaps.
AI-assisted interpretation
The following is analysis, separate from reported facts. Verify important claims independently.
This is a comment letter representing Circle’s recommendations regarding the SEC proposed crypto-asset regulatory rules; it is not a SEC final decision that has already been made.
Why it matters to readers
If the relevant recommendations are adopted, the rules governing payment stablecoins’ treatment in broker-dealer accounting, customer reserves, and haircuts may change.
Put simply, Circle wants eligible payment stablecoins to be treated more like cash in certain regulatory contexts, and broker-dealers would not need to apply a 2%haircut.
Risks and unknowns
SEC It remains unclear whether the relevant authorities will respond to or adopt Circle’s recommendations.
It remains unclear whether the final rules will confirm the cash status of payment stablecoins and a zero haircut.
Recommendations in a comment letter do not constitute final regulatory rules.
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Related concepts
Stablecoin
An asset that seeks to track a reference value and is subject to risks including depegging, reserves, and redemption.
