4 Minutes
SEC reduces capital haircut on payment stablecoins to 2%
The U.S. Securities and Exchange Commission has quietly changed course on how broker-dealers can treat qualifying payment stablecoins on balance sheets. In fresh guidance from the Division of Trading and Markets, SEC staff indicated they "would not object" if broker-dealers applied a 2% capital haircut to proprietary positions in approved payment stablecoins when calculating net capital — a sharp retreat from the de facto 100% deduction many firms had been assuming.
This recalibration effectively allows $100 of compliant stablecoins to count as $98 toward a firm’s net capital, putting them on par with conservative money market funds. The decision follows new statutory standards established by the GENIUS Act and signals regulatory acceptance of certain stablecoins as cash-equivalent settlement instruments within regulated markets.
Why it matters for on-chain settlement and broker-dealers
Reducing the haircut from 100% to 2% removes a major economic obstacle for broker-dealers considering on-chain settlement. Previously, treating stablecoin balances as having no net capital value made using tokenized cash impractical inside regulated securities workflows. With the haircut slashed, payment stablecoins that meet issuer reserve and oversight standards can be integrated into custody, clearing, and settlement operations without destroying dealers’ capital ratios.
Market lawyers and trading desks view the FAQ as a practical follow-through to the GENIUS Act’s reserve rules for stablecoin issuers. SEC Commissioner Hester Peirce — a long-time advocate for workable market rules around tokenization — described the change as a correction to a punitive stance that had sidelined stablecoins from regulated plumbing. Analysts expect this alignment to accelerate institutional use of on-chain liquidity and tokenized settlement rails.
Market reaction and crypto price context
The guidance arrives against a backdrop of steady crypto markets. Bitcoin is trading near $68,100 with roughly $33 billion in 24-hour turnover, while Ethereum sits around $1,960 on roughly $18 billion of volume. Tether (USDT) maintains its $1 peg and remains the deepest dollar-linked stablecoin, seeing approximately $57 billion–$68 billion in daily trading volume.
These price and volume metrics suggest that liquidity conditions are robust enough for market participants to explore new settlement models that lean on on-chain assets. As trading desks and prime brokers reassess infrastructure, stablecoins could play a larger role in cross-border payments, collateral management, and intraday funding.
Regulatory and market-structure implications
Observers expect the haircut decision to shape upcoming legislative and rule-making debates over crypto market structure, including the CLARITY Act and other proposed frameworks. Treating compliant payment stablecoins more like cash equivalents narrows the gap between traditional market plumbing and blockchain-native settlement, potentially enabling exchanges, ATSs, and broker-dealers to pair crypto asset securities with non-securities in new ways.
Legal experts say this guidance reduces a key compliance barrier, but not all operational and legal hurdles are cleared. Exchanges and regulated intermediaries will still need written policies, custody solutions, risk controls, and clear issuer compliance documentation before adding stablecoins to capital and settlement workflows.
What firms should do next
Broker-dealers and market participants should: 1) review issuer compliance with GENIUS Act–style reserve and oversight requirements; 2) update net-capital models and risk frameworks to reflect a 2% haircut where applicable; 3) implement custody, reconciliation, and operational controls to support on-chain settlement; and 4) monitor evolving SEC guidance and parallel legislative initiatives such as the CLARITY Act.
In short, the SEC’s FAQ marks a practical, market-friendly pivot that reduces a long-standing drag on tokenized settlement. By allowing approved payment stablecoins to count toward net capital with only a modest haircut, the regulator has opened the door to deeper integration of stablecoins into regulated markets — provided issuers, broker-dealers, and trading venues meet the necessary compliance and operational standards.
Source: crypto
Leave a Comment