Broker-dealers regulated by the U.S. Securities and Exchange Commission (SEC) can treat their stablecoin holdings as regulatory capital, according to an adjustment this week to a frequently asked questions document maintained by the agency.
That’s a big shift, in the form of a small addition to the SEC’s “Broker-Dealer Financial Responsibility” FAQs. Since the cryptocurrency task force began its work during President Donald Trump’s administration, regulators have made a steady stream of changes to their approach to cryptocurrencies through informal guidance, industry letters and staff statements.
In this case, a fifth new question has been added, which is what kind of “haircut” companies should take on the stablecoins they hold (USD-pegged tokens such as Circle’s USDC and Tether’s USDT). The answer is 2%, meaning firms will be able to count 98% of holdings, as opposed to the previous understanding that such assets were not measurable against broker-dealer capitalization (100% discount).
“This means that stablecoins are now considered money market funds on corporate balance sheets,” Tonya Evans wrote in a post on social media site X. Tonya Evans is a former professor who now runs a cryptocurrency education business and is a board member of Digital Currency Group. “To this day, some brokerages zero out stablecoin holdings in capital calculations. Holding stablecoins is a financial penalty. That’s the end of it.”
Previously, tighter SEC restrictions meant that these firms (companies registered with the SEC to process securities transactions for clients and trade securities on their own behalf) could not easily host tokenized securities or act as intermediaries in transactions. Now, companies that follow the agency’s guidance will be able to more easily provide liquidity, aid settlements and advance tokenized financing.
“These calculations are being made everywhere from Robinhood to Goldman Sachs,” Larry Florio, deputy general counsel at Ethena Labs, wrote in an explanation posted on LinkedIn. Stablecoins are now working capital, he said.
SEC Commissioner Hester Peirce, who leads the agency’s working group and issued a statement on the change, argued that the use of stablecoins “will enable broker-dealers to engage in a broader range of business activities related to tokenized securities and other crypto-assets.” She said she wanted to consider how existing SEC rules could be modified to accommodate payments for stablecoins.
That’s the downside of informal employee policies—they’re just as easily overridden as the time they’re issued, and don’t carry the weight (and legal protection) of rules.
The SEC has been working on some cryptocurrency rules in recent months, but they have yet to be enacted, and the process typically takes months or even years. Even formal rules can still be overturned by the agency’s new leadership, which is why cryptocurrency advocates are pushing Congress for more legislation to codify the government’s approach to digital assets into law, such as last year’s Stablecoin Guidance and Establishing National Innovation in the United States (GENIUS) Act.
