SEC Issues 2% Stablecoin Capital Guidance, Softening Regulatory Pressure

• The US SEC now allows broker-dealers to apply a 2% haircut on payment stablecoins.
• SEC said the guidance only reflects staff views and has no legal force
• The clarification opens the door for broader use of stablecoins in broker-dealer operations

The US Securities and Exchange Commission issued new guidance on Feb. 19 through its Division of Trading and Markets. The update explains how broker-dealers can treat payment stablecoins under Exchange Act Rule 15c3-1, known as the net capital rule.

The staff said it would not object if broker-dealers apply a 2% haircut to proprietary positions in payment stablecoins when calculating net capital. This means firms can count 98% of a stablecoin’s value toward regulatory capital.

This changed earlier treatment that effectively imposed a 100% haircut. Under that approach, stablecoins could not count toward capital at all. The new rule sharply reduces that burden.

The adjustment places payment stablecoins with money market funds that have similar asset backing. It increases capital efficiency and liquidity for broker-dealers that hold stablecoins.

The SEC said the guidance only reflects staff views and has no legal force, creates no new obligations, and does not change existing law. It simply clarifies how current rules apply.

Related: XRP ETF Deadline: SEC to Decide on T. Rowe Price by February 26

Market impact and regulatory scope

The clarification opens the door for broader use of stablecoins such as USDC and USDT in broker-dealer operations. Firms can now treat these dollar-linked tokens as measurable capital instead of excluded assets.

The Division also addressed other crypto-related issues. These include custody requirements, transfer agent registration, exchange and alternative trading system operations, clearing and settlement, and exchange-traded products tied to digital assets.

The document explains how Rule 15c3-3 applies to crypto asset securities. It also states that compliance with the SEC’s 2020 special purpose broker-dealer statement is not mandatory.

The guidance further describes how protections under the Securities Investor Protection Act of 1970 and the Securities Investor Protection Corporation may apply to certain crypto assets.

The staff also outlined conditions where distributed ledger technology can be used for transfer agent recordkeeping. 

Peirce backs approach, seeks rule changes

SEC Commissioner Hester M. Peirce said stablecoins are essential for transactions on blockchain systems and can help broker-dealers expand activity in tokenized securities and other crypto markets.

She also called for formal amendments to Rule 15c3-1 to better account for payment stablecoins. Peirce invited feedback from market participants on possible changes and broader updates to SEC rules affecting stablecoin use.

Related: Leaked 2018 Email Linking Gensler and Epstein Resurfaces