The U.S. Securities and Exchange Commission (SEC) has issued new guidelines allowing securities broker-dealers to apply a 2% haircut on stablecoin holdings when calculating capital. This is a significant shift from the previous common market practice of applying a 100% haircut, which effectively excluded stablecoins from capital calculations. This move will substantially improve the regulatory standing of stablecoins, potentially reducing the capital costs for broker-dealers holding stablecoins and paving the way for tokenized securities and other crypto asset businesses.
SEC Loosens Capital Rules: Stablecoins Now Included at 2% Haircut
According to a FAQ released by the SEC’s Division of Trading and Markets, if broker-dealers hold certain stablecoins as proprietary positions, regulators “will not oppose” applying a 2% haircut. The haircut refers to the percentage deducted from an asset’s value to reflect risk when included in regulatory capital. Higher-risk and more volatile assets receive larger haircuts.
Previously, some market participants treated stablecoins with a 100% haircut, effectively excluding them from capital calculations, leaving broker-dealers with no reason to hold stablecoins under capital regulations. With this adjustment, stablecoins can now be included at 98% of their book value in regulatory capital, aligning their treatment with other low-risk liquid assets.
Lower Capital Thresholds: Paving the Way for Tokenized Securities and On-Chain Settlement
SEC Commissioner Hester Peirce stated in a release: “Stablecoins are a fundamental tool for blockchain transactions. Widespread use within a regulatory framework will make it easier for broker-dealers to expand into tokenized securities and other crypto-related businesses.”
She believes stablecoins play a critical role in on-chain infrastructure for tokenized stocks, bonds, and other assets, enabling real-time clearing and settlement. As capital requirements decrease, market participants will be more incentivized to include stablecoins on their balance sheets, fostering growth in on-chain settlement, digital securities issuance, and custody services.
Enhanced Status for Stablecoins, Equal to Money Market Funds
Fintech strategist Tonya Evans pointed out that the previous 100% haircut kept the cost of holding stablecoins high:
The 2% haircut now places payment stablecoins on equal footing with money market funds, which typically hold high-liquidity assets such as U.S. Treasuries, cash, and short-term government securities.
Former Avalanche COO Luigi D’Onorio DeMeo also noted that this change removes a major friction point for stablecoins entering the traditional financial system, helping to improve liquidity, streamline clearing, and provide more institutional access, accelerating the integration of traditional finance onto the blockchain.
From Darkness to Light: SEC Advances Modernization of Crypto Regulation
This FAQ update is seen as part of the SEC’s recent efforts to modernize crypto regulation. Over the past year, the SEC has established a dedicated crypto assets task force and launched “Project Crypto,” focusing on custody, tokenization, and market structure issues.
At the federal level, efforts are underway to establish a regulatory framework for stablecoins, including the bipartisan “GENIUS Act” signed into law last July, and ongoing negotiations over the “CLARITY Act,” a bill addressing crypto market structure and stablecoin yield controversies.
(White House Stablecoin Meeting Preliminary Conclusion: Activity-based Rewards and Idle Balances Not Earning Interest)
Against this backdrop, allowing stablecoins to be included in regulatory capital at a low 2% haircut indicates that regulators are seeking a balance between risk management and fostering innovation. This approach could help solidify and expand stablecoins’ role and influence in capital markets.
This article, “U.S. SEC Opens Broker-Dealers to 2% Haircut for Stablecoin Capital, Promoting Tokenization and Crypto Business Development,” first appeared on Chain News ABMedia.
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